Energy efficiency and behavioral econ
Posted by Rich Sweeney on April 3, 2008
Normally I’m not a big fan of John Tierney, but this piece from last week was really interesting. Recounting experiments detailed in “Nudge”, Tierney muses over innovative new ways for people to monitor their carbon footprint and show off their environmental piety. Here’s the behavioral evidence that caught my eye:
“Getting the prices right will not create the right behavior if people do not associate their behavior with the relevant costs,” says Dr. Thaler, a professor of behavioral science and economics. “When I turn the thermostat down on my A-C, I only vaguely know how much that costs me. If the thermostat were programmed to tell you immediately how much you are spending, the effect would be much more powerful.”
It would be still more powerful, he and Mr. Sunstein suggest, if you knew how your energy consumption compared with the social norm. A study in California showed that when the monthly electric bill listed the average consumption in the neighborhood, the people in above-average households significantly decreased their consumption.
Meanwhile, the people with the below-average bills reacted by significantly increasing their consumption — not exactly the goal of the project.
That reaction was avoided when the bill featured a little drawing along with the numbers: a smiling face on a below-average bill or a frowning face on an above-average bill. After that simple nudge, the heavy users made even bigger cuts in consumption, while the light users remained frugal.
Tierney goes a little crazy with the jewelry stuff towards the end, but overall I like the idea of thinking outside the box when it comes to monitoring energy use.