Do Bill Shocks Induce Energy Efficiency Investments?

Corey Lang (), Kevin Nakolan (), David Rapson and Reid Taylor
Additional contact information
Corey Lang: https://web.uri.edu/enre/meet/corey-lang/

No 2405, Working Papers from Federal Reserve Bank of Dallas

Abstract: Inattention can lead to suboptimal investment in energy efficiency. We study whether electricity bill shocks draw attention to the benefits of home energy efficiency investments. Our novel identification strategy builds on the fact that prolonged extreme weather events (which raise electricity costs for many customers) fall within a single billing cycle for some customers but are split across cycles for others. We find that households exposed to average sized bill shocks are 22 percent more likely to invest in energy efficiency than households with normal bills. This result suggests that inattention is indeed a factor in residential energy decisions and utilities may be able to leverage bill shocks to promote efficiency investments.

JEL-codes: D12 Q40 Q50 (search for similar items in EconPapers)
Pages: 39
Date: 2024-09-20
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.dallasfed.org/-/media/documents/research/papers/2024/wp2405.pdf Full text (application/pdf)

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: https://EconPapers.repec.org/RePEc:fip:feddwp:98834

Ordering information: This working paper can be ordered from

DOI: 10.24149/wp2405

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Dallas Contact information at EDIRC.
Bibliographic data for series maintained by Amy Chapman ().