Behavioral Economics Policy Impact and Future Directions (2023) / Chapter Skim
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Pages 143-152
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From page 143... ...
Social Preferences and Norms Moral suasion (informing people of desirable behaviors) and appealing to social norms and social comparisons are among the most used and studied behaviorally based interventions to encourage energy conservation (Carlsson et al., 2021a)
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Similarly, field experiments and quasi-experiments, as well as observational studies, have shown that peer effects and provision of information about social norms affect households' adoption of solar panels. This work suggests that the effects are strongest when neighboring solar panels are visible from the street and when they are numerous.
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Traditional economic models are based on the assumption that consumers correctly value future operating costs when assessing the tradeoffs between the cost of a vehicle and the expected costs. However, behavioral economists have shown that consumers frequently underestimate the savings they would realize with an energy-efficient vehicle when choosing between that option and a less fuel-efficient one and that car buyers typically calculate fuel savings without considering the present discounted value of future fuel costs (Gillingham & Palmer, 2014)
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Reference Dependence Consumers can directly reduce their carbon footprints by opting to use public transportation for daily commutes and other long-distance trips, carpooling, or planning trips more efficiently. Established habits are a key barrier to such decisions, and strategies for addressing this include asking people to make visible personal commitments and personalized trip plans (Chen & Chao, 2011; Verplanken & Roy, 2016)
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LAND USE DECISIONS Climate change poses a severe threat to agricultural productivity, which is affected by variability in weather, rising temperatures, flooding and other natural disasters, and invasive pests. At the same time, agriculture contributes 19–20 percent of total greenhouse gas emissions worldwide (World Bank, 2021)
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Studies in all three domains have addressed limited attention and cognition and appeals to social norms; present bias and reference dependence have also been considered in the domains of 7Empathy nudges are designed to appeal to specific behavioral factors, such as one's sense of self (ego) or the potential to feel empathy.
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From page 149... ...
• Nudges related to social norms and preferences -- if carefully tar geted to specific populations -- showed modest effects for encour aging energy conservation, climate-friendly transportation choices, and land use decisions. Since these are low-cost interventions, they still often have a high return (despite modest effect sizes)
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American Economic Review, 104, 3003–3037. https://doi.org/10.1257/aer.104.10.3003 Allcott, H., & Taubinsky, D
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The role of environmental identity for energy conservation. Journal of Environmental Economics and Management, 108, 102467.
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Understanding low take-up of a free energy efficiency program. American Economic Review, 105, 201–204.
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