Knowledge, Neighbours and Nuggets

Two effortless ways incentives delivered dramatic energy savings to households

Issues and Impacts

Knowledge, Neighbours and Nuggets

Context

Measured behavioural changes are the most cost effective methods of energy reduction. In a domestic setting, we prove that the provision of framed information to households can have a dramatic effect on their consumption. Within this randomised control trial, we assessed the effects of ‘social norm’ comparisons, the provision of energy saving information and the provision of a variety of financial incentives.

Knowledge, Neighbours and Nuggets

In two studies we showed that energy saving behaviour change can deliver huge benefits to households at little cost, through the application of behavioural science. In the first study 569 households were randomly allocated to three groups, which received the following letters in 6 monthly intervals over 15 months: –  (i) control with a basic energy statement; (ii) treatment 1 – norms only; (iii) treatment 2 – norms with information. The control group had a basic energy statement, and the norms only group had the basic statement with a bar graph illustrating their consumption in comparison to the average in their neighborhood for their property size – the descriptive social norm. So our definition of social norms here is the average consumption of similar sized properties in the neighborhood.

Our second study involved 2142 households over a four month period, randomly allocated into eight groups: – (i) control (ii) online (i.e. email) social norm; (iii) offline (i.e. letter) social norm; (iv) high-user frame (online); (v) high-user frame with social norm (online); (vi) social norm and £10 incentive for reaching an exogenous target (online); (vii) social norm and £100 incentive for reaching an exogenous target (online); (viii) £100 incentive for reaching an exogenous target (online). This will allow us to test social norms and how they interact with the mode of delivery, high-user frame, and financial rewards. The importance of comparing (iv) and (v) will demonstrate whether the norm is related to being energy inefficient, in that we notify individuals that they are a high end user to determine whether this is any different to a norm (even though social averages are not used). The importance of (vi), (vii) and (viii) will demonstrate whether financial rewards help or hinder social norms for energy conservation.

The Results

In our first study we found striking results: Both sets of households that received framed information significantly reduced their energy consumption. The group with information reducing energy reducing by at least twice as much as the first treatment. However, this ‘ahead’ did not last for the 15 month period, and by the end of the study, both sets of users were displaying the same levels of energy consumption.
For the second study we show that offline social norms work better than online social norms, which is an important communication finding. This is surprising given that these customers are used to information being delivered online. It is also surprising given the 6 unequivocal impact that norms have in an offline delivery mode.What was also interesting was the finding that different interventions can in fact crowd each other out, which was shown by the lack of effect of peer comparisons combined with financial incentives.