The influences of financial and non-financial factors on energy-saving behaviour: A field experiment in Japan

Abstract

This study examines the influences of financial and non-financial factors on electricity-conservation behaviour. A random sample of 236 Japanese households participated in the field experiment and the participants were offered two interventions, such as monetary rewards, depending on their reduction in electricity consumption and comparative feedback. The average saving rates of the (i) reward-intervention group (5.9%) and the (ii) reward with comparative feedback group (8.2%) are statistically larger than those of the (iii) control group (1.7%). Our study demonstrates the following. First, our econometric analysis confirmed a significant response by households to financial incentives but a more inconclusive response to the treatment that provided non-financial, additional information. Second, we found a positive influence of treatment externalities across time and households on energy saving. Third, there is a heterogeneous treatment effect in the reward-intervention group, with the households having a high New Ecological Paradigm (NEP) score being more likely to respond to the reward programme and save electricity than those that do not. Finally, and most interestingly, differences in responses to the questionnaire before and after the experiment suggest that the participants had underestimated the marginal costs of saving electricity before they actually started to do so.