The Welfare Effects of Nudges: A Case Study of Energy Use Social Comparisons / Hunt Allcott, Judd B. Kessler.

Format:

Book

Author/Creator:

Allcott, Hunt.

Contributor:

National Bureau of Economic Research.

Kessler, Judd B.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21671.

NBER working paper series no. w21671

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Welfare Effects of Nudges

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

"Nudge"-style interventions are often deemed "successful" if they cause large behavior change, but they are rarely subjected to full social welfare evaluations. We combine a field experiment with a simple theoretical framework to evaluate the welfare effects of one especially policy-relevant intervention, home energy social comparison reports. In our sample, the reports increase social welfare, although traditional evaluation approaches overstate welfare gains by a factor of 3.7. Overall, the welfare gains from home energy reports might be overstated by $620 million. We develop a prediction algorithm for optimal targeting; this would double the welfare gains.

Notes:

Print version record

October 2015.