Financial and Non-Financial Incentives, and the Crowding-Out Effect: Evidence from a Field Experiment on Residential Electricity Consumption in Switzerland

Valentin Favre-Bulle and Sylvain Weber

No 26-04, IRENE Working Papers from IRENE Institute of Economic Research

Abstract: We examine the impact of monetary and non-monetary incentives, individually and combined, on residential electricity consumption. A field experiment in Switzerland provided all participants with access to a custom-developed app offering feedback on electricity use and energy-saving tips. In addition to the control group, one treatment group received social comparisons based on savings relative to similar households, while a second group additionally received financial rewards linked to their electricity savings. We find no strong evidence of treatment effects. We do not observe crowding-out effect from combining monetary and non-monetary incentives, as the difference between treatments is not significant. Treatment effects appear to differ between PV and non-PV owners, with some indication of greater effectiveness for the latter, though further research is needed. Compared to a non-participant group, participation in the experiment and use of the application marginally reduced electricity consumption.

Keywords: Household electricity usage; Demand-side management; Smart metering; Randomised control trial; Field experiment; Difference-in-differences; Crowding-out effect; Social incentives; Financial incentives. (search for similar items in EconPapers)
JEL-codes: C93 D12 L94 Q41 (search for similar items in EconPapers)
Pages: 68 pages.
Date: 2026-02
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-nud
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