Elsevier

Ecological Economics

Volume 191, January 2022, 107231
Ecological Economics

ANALYSIS
Reducing consumption of electricity: A field experiment in Monaco with boosts and goal setting

https://doi.org/10.1016/j.ecolecon.2021.107231Get rights and content

Highlights

  • Energy saving goals combined with boosts generate energy conservation.

  • Modest energy saving goals generate better energy conservation performance.

  • Energy saving goals combined with boosts perform well with individuals highly concerned by the environment.

  • Goal setting and boosts implementation should target specific individuals' category.

Abstract

We investigate the complementarity among different treatments which involved “boosts” (provision of information) and “goals” (ambitious or modest goals) by means of a field experiment conducted in the Principality of Monaco between December 2018 and May 2019. We collected data from 77 households in four groups: ambitious electricity reduction goal combined with information (Treatment 1), modest electricity reduction goal combined with information (Treatment 2), only information (Treatment 3), and a control group (CG). Treatments 1 and 2 increased the chances of reduced electricity consumption. We show that a modest, more realistic electricity saving goal when combined with a “boost” generates better electricity conservation performance (T2). We explore the link between behavioral strategies and the household's concern for the environment in the context of the new ecological paradigm (NEP). Our results show that treatments T1 and T2 are efficient for reducing electricity consumption only in households with high levels of environmental concern; those whose level of concern about the environment is low will not respond to any of the behavioral interventions. We provide some recommendations for the implementation of behavioral tools and “boosts”.

Introduction

Behavioral tools have attracted the attention of policy makers by providing concrete mechanisms and allowing actions in a range of fields: health, waste, energy preservation, nutrition among others (Hertwig and Ryall, 2020). The myriad examples around the world of use of nudges show their inherent attractiveness. It has been shown that certain behavioral tools such as nudges, boosts, and goals can promote green behaviors. Among these behavioral tools, boosts seem to have good potential by empowering individuals to rid themselves of biased judgments. For policy makers, agency is an important issue (i.e. how to influence changes at the individual level, in which context, and for what reasons). These ethical issues should not be neglected in deciding about appropriate tools. The adoption of greener behaviors is hampered by material, technological, financial, psychological and other dimensions. These biases mean that traditional approaches such as awareness campaigns and technological innovations proposed by standard economists may fail to generate lasting change. Behavioral economics may provide robust tools to help to reduce energy use, conserve water, and tackle nutrition, and health issues to accelerate the ecological transition; however, their implementation requires certain conditions.

Indeed, changing individual behavior towards reducing consumption of electricity takes much time and effort and is affected by problems such as potential inertia, individual agency, and motivation. These problems are linked to an overemphasis on energy efficient equipment policies rather than behavioral actions which improve individual level abilities (Maréchal and Holzemer, 2015; Buckley, 2020). Additionally, electricity is an invisible commodity which contributes to lack of awareness about its daily consumption (Hargreaves et al., 2013). European households are poorly informed about their electricity use and may lack knowledge about how to act on this issue (Belaïd and Joumni, 2020; Buckley, 2020).

Among the non-monetary tools that have been applied in the context of electricity consumption, nudges have become increasingly popular for correcting certain behavioral cognitive biases (Buckley, 2020; Schubert, 2017). In a recent meta-analysis of monetary and non-monetary interventions for households, Buckley (2020) shows that they can result in an overall reduction in electrical energy consumption of between 1.87% and 3.91%. When she compared differences among behavioral tools, Buckley found that monetary tools did not have a significant effect whereas non-monetary tools such as “information on households own consumption delivered via paper bills, online or in real-time and personalized advice are found to be most effective at lowering residential electricity consumption” (Buckley, 2020: 12).

Nudges which have been identified as promising for reducing electricity consumption (Charlier et al., 2020) suffer from several ethical problems (Schubert, 2017; Bradt, 2019; Hertwig and Ryall, 2020). They can alter citizens' behaviors by harnessing their cognitive biases but may not generate robust and durable behavioral changes. They are also highly context dependent (Schubert, 2017; Allcott and Rogers, 2014).

Boosts are seen as different from nudges (Schubert, 2017) and “self-nudges” (Reijula and Hertwig, 2020) and are attracting the attention of policy makers and practitioners (DellaValle and Sareen, 2020). Boosts allow citizens to improve their skills (Hertwig, 2017). While proponents of nudges consider that human beings are prisoners of their automatic systems of cognition (Kahneman, 2011), proponents of boosts assume that individual competences can be enhanced and that individuals can overcome their biases through training (Hertwig and Ryall, 2020; Bradt, 2019). Thus, although boosts have attracted less attention than nudges, they represent an interesting line of enquiry in the context of behavioral tools to improve households' knowledge about electricity consumption.

Another behavioral tool which has been used in the context of reducing electricity consumption is goal setting. Andor and Fels (2018) consider that a goal can become a concrete point of reference whose accomplishment will increase extrinsic forms of motivation. Goals combined with advice have received little research attention and are “a promising avenue for further research” (Andor and Fels, 2018: 186).

Given the limitations of nudges (Rebonato, 2012) and the unexplored potential of boosts combined or not with goals, we decided to investigate the relevance of these latter in the case of Monaco, a sovereign city-state located on the French Riviera in Western Europe. Monaco is interesting for at least two reasons. First, local government is keen to achieve an energy transition, and second, there are no empirical studies on this geographical area. In 2018 we implemented a field experiment designed to tackle the issue of reducing electricity consumption and measuring the effects on citizens' electricity consumption of boosts and goals.

We collected data from 77 households in four groups: ambitious electricity reduction goal combined with boosts (T1), modest electricity reduction goal combined with boosts (T2), only boosts (T3), and a control group with no goals and no boosts (CG). Our empirical findings show that the T1 and T2 groups reduced their electricity use which suggests that goals – especially realistic goals - combined with a boost produce better outcomes in terms of behavioral change.

The paper is organized as follows. Section 2 reviews the literature on behavioral tools related to electricity consumption. Section 3 describes the design of the experiment and the protocol, and Section 4 presents the data analysis. Section 5 examines the sample and the data, and Section 6 presents the results. Section 7 discusses our findings and some limitations of our study and whether it could be replicated in other contexts. Section 8 concludes the paper and provides some recommendations for policy.

Section snippets

Behavioral tools and electricity consumption: A short review

Policy makers are often inspired by behavioral science in their policy design and policy adaptations to different contexts (Schleyer, 2017; DellaValle and Sareen, 2020). According to Dolan et al. (2012), the most effective interventions for persuading individuals to adopt green behaviors are those which aim to change contexts and mindsets which suggests that nudges, goals, and boosts might be effective behavioral interventions. However, ethical assumptions and sources of inspiration for these

Field experiment method and recruitment of participants

The field experiment was conducted in the Principality of Monaco over the six-month period December 2018 to May 2019 (see Fig. 1). This is a unique setting. First, a large proportion of its population are financially well endowed and live in apartments in tower blocks that were built mostly in the 1970s. Second, average electricity consumption per inhabitant in Monaco tends to be below the average for its neighbor France. However, this is due mostly to Monaco's residents spending only part of

Dependent variable: Household consumption of electricity

Quarterly data on electricity consumption in kWh were provided to each volunteer household by the local provider. These data allowed us to build our dependent variable i.e. average household electricity consumption per month in kWh. We measured the dependent variable at two points in time: pre-treatment period (6 months), and intervention period (6 months).6

Data and sample characteristics

Table 2 and Table 3 present the characteristics of the sample that completed the ex-ante and ex-post questionnaires and are permanent residents.

Evolution of electrical consumption across treatments

Table 4 presents the descriptive statistics for electricity consumption across the four treatments.15 Average monthly electricity consumption shows that the group which

Discussion

Our empirical findings are fourfold. First, when implemented in combination with a goal (ambitious or modest), boosts can have a significant effect on reducing electricity use. In other words, setting a precise goal and providing boosts incentivizes the household to act and to reduce its electricity consumption. That is, a boost increases the household's knowledge about electricity usage and providing suitable means for steering households in the presence of goals (Martela, 2015). In this case,

Conclusions and policy implications

Boosts seem to be a promising and novel tool which require some pre-conditions before being implemented. Goal setting is a classic tool which has good outcomes and a greater impact when combined with other tools. Our results show the effect of goals and boosts on energy conservation, and their complementarity and effectiveness for steering individuals to reduce their electricity consumption. Outcomes for high NEP profile households show their inherent limits which policy makers should consider

Declaration of Competing Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Acknowledgements

This research benefited from financial support from SMEG Monaco under the Smartlook Project (SMEG/UNS :2016/398/CNRS : 151910).

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