American Economic Review2014-11-19 12:21 PM

The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation

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.


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American Economic Review

The American Economic Review is a general-interest economics journal. Established in 1911, the AER is among the nation's oldest and most respected scholarly journals in the economics profession.

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