Goal Setting and Energy Conservation

Matthew Harding () and Alice Hsiaw

No 1403, Working Papers from College of the Holy Cross, Department of Economics

Abstract: This paper develops a theoretical model of consumer demand for an energy conservation program that involves non-binding, self-set goals. We present evidence from a Northern Illinois goal-setting program, aimed at reducing residential electricity consumption, that is difficult to reconcile with standard preferences and is broadly consistent with a model of presentbiased consumers with reference-dependent preferences. We find that the need for commitment is correlated with program adoption, higher pre-adoption consumption, and lower responsiveness to goals. Consumers choosing realistic goals persistently save substantially more, achieving savings of nearly 11%, than those choosing very low or unrealistically high goals.

Pages: 38 pages
Date: 2014-04, Revised 2014-08
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Published in Journal of Economic Behavior and Organization, Volume 107, Part A, November 2014, Pages 209-227.

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Journal Article: Goal setting and energy conservation (2014)
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