Green is Good-The Impact of Information Nudges on the Selection of Voluntary Green-Power Plans

Eric Cardella, Bradley T. Ewing, and Ryan B. Williams

The Energy Journal, 2022, vol. Volume 43, issue Number 1

Abstract: A recent trend has been a move toward greater reliance on renewable or green energy sources, especially in the residential sector. Using a choice experiment, this paper examines how providing information regarding the efficiency, cost, and environmental impacts of different power-generating sources impact consumers stated preferences for selecting voluntary green-power plans. Based on 21,000 plan choices from two different samples totaling over 1,800 respondents, our results indicate that information nudges significantly impact respondents choice of plan. Promoting the advantages of the green plan or the disadvantages of the gray plan increase green plan selection. The magnitudes of these estimated effects are economically significant being roughly equivalent to a change in the monthly green price premium of $4/month. We also find that promoting the advantages of the green plan is more effective when the green plan premium is relatively small, while highlighting the drawbacks of the gray plan is more effective when the green plan premium is relatively large. Our results suggest that information nudges have the potential to be a plausible, economical, and effective mechanism to increase adoption of voluntary green-power plans.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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