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The Persistence of Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand

Koichiro Ito (), Takanori Ida and Makoto Tanaka ()

No 20910, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Firms and governments often use moral suasion and economic incentives to influence intrinsic and extrinsic motivations for various economic activities. To investigate the persistence of such interventions, we randomly assigned households to moral suasion and dynamic pricing that stimulate energy conservation during peak demand hours. Using household-level consumption data for 30-minute intervals, we find significant short-run effects of moral suasion, but the effects diminished quickly after repeated interventions. Economic incentives produced larger and persistent effects, which induced habit formation after the final interventions. While each policy produces substantial welfare gains, economic incentives provide particularly large gains when we consider persistence.

JEL-codes: D12 L11 L94 L98 Q4 Q41 Q5 Q58 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-ene and nep-exp
Note: EEE IO PE
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