Economics at your fingertips  

Nudges in the marketplace: The response of household electricity consumption to information and monetary incentives

Anant Sudarshan

Journal of Economic Behavior & Organization, 2017, vol. 134, issue C, 320-335

Abstract: This paper provides field evidence from India examining changes in electricity consumption in response to various behavioral interventions. I study the impact of (i) weekly reports with peer comparisons of electricity use; (ii) reports augmented with monetary incentives to reduce consumption and (iii) price variation. I estimate consumption changes using a randomized control trial in conjunction with a quasi-experiment. Households provided reports alone reduced summer season consumption by 7 percent. Price elasticity identified from cross-sectional and time series variation was estimated at −0.56. Against this benchmark, the impact of peer comparisons alone was equivalent to increasing tariffs by about 12.5 percent. Counter-intuitively, when weekly reports were augmented with monetary incentives rewarding electricity conservation, households no longer reduced consumption. Households receiving reports also show higher price elasticity relative to controls. These results provide new evidence identifying the response of developing country consumers to behavioral interventions while examining the interaction of prices, incentives and information.

Keywords: Electricity demand management; Social norms; Nudges; Incentives; Conditional cash transfers; Price elasticity (search for similar items in EconPapers)
JEL-codes: D03 D11 L97 Q41 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-07-17
Handle: RePEc:eee:jeborg:v:134:y:2017:i:c:p:320-335