The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation
American Economic Review
vol. 104,
no. 10, October 2014
(pp. 3003-37)
Abstract
We document three remarkable features of the Opower program, in which social comparison-based home energy reports are repeatedly mailed to more than six million households nationwide. First, initial reports cause high-frequency "action and backsliding," but these cycles attenuate over time. Second, if reports are discontinued after two years, effects are relatively persistent, decaying at 10-20 percent per year. Third, consumers are slow to habituate: they continue to respond to repeated treatment even after two years. We show that the previous conservative assumptions about post-intervention persistence had dramatically understated cost effectiveness and illustrate how empirical estimates can optimize program design.Citation
Allcott, Hunt, and Todd Rogers. 2014. "The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation." American Economic Review, 104 (10): 3003-37. DOI: 10.1257/aer.104.10.3003Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- L94 Electric Utilities
- Q41 Energy: Demand and Supply; Prices