Social norms and energy conservation

This paper evaluates a series of programs run by a company called OPOWER to send Home Energy Report letters to residential utility customers comparing their electricity use to that of their neighbors. Using data from randomized natural field experiments at 600,000 treatment and control households across the United States, I estimate that the average program reduces energy consumption by 2.0%. The program provides additional evidence that non-price interventions can substantially and cost effectively change consumer behavior: the effect is equivalent to that of a short-run electricity price increase of 11 to 20%, and the cost effectiveness compares favorably to that of traditional energy conservation programs. Perhaps because the treatment included descriptive social norms, effects are heterogeneous: households in the highest decile of pre-treatment consumption decrease usage by 6.3%, while consumption by the lowest decile decreases by only 0.3%. A regression discontinuity design shows that different categories of “injunctive norms” played an insignificant role in encouraging relatively low users not to increase usage.

Research Highlights
► This paper evaluates effects of mailing social comparisons to residential energy users.
► The average program reduces energy consumption by 2.0 percent.
► Cost effectiveness compares favorably to traditional energy conservation programs.
► Heterogeneous treatment effects, and highest users decrease usage by 6.3 percent.
► RD shows that injunctive norm categorizations had insignificantly different effects.