Energy Conservation “Nudges” and Environmentalist Ideology: Evidence From a Randomized Residential Electricity Field Experiment

How should households be encouraged to reduce electricity consumption? This column presents evidence from the US of a randomised “nudging” strategy – providing energy saving tips as well as information on electricity usage relative to neighbours. It finds that while energy conservation nudges work with liberals, they backfire with conservatives. Certain pockets of Republican registered voters actually increased their electricity consumption in reaction to the nudge.

Behavioural economists have promoted the use of “nudges” to encourage energy conservation (Allcott and Mullainathan 2010 and Thaler and Sunstein 2008). “Nudges” offer a politically palatable alternative to stricter building codes and price increases. Research by Allcott (2009), Ayers et al. (2009), and Schultz et al. (2007) found that providing feedback to customers on home electricity and natural gas usage with a focus on peer comparisons decreased consumption by 1% to 2%, potentially saving 110 million kWh per year if feedback were provided to all of the utility’s customers (Ayers et al. 2009).