The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation
American Economic Review · 2014 · Volume 104 · Issue 10
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.
Keywords
Consumer Economics: Empirical Analysis, Search, Learning, Information and Knowledge, Communication, Belief, Electric Utilities, Energy: Demand and Supply, Prices
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