Non-price Interventions Research Articles

Combining price and non-price interventions for water conservation

Abstract Marginal pricing has long been the instrument of choice to address water conservation challenges. More recently, non-price behavioral interventions have emerged as an alternative. However, there is limited data on the relative efficacies of price and non-price interventions. We report results from long-term field experiments studying unit-level water conservation responses to both price and non-price interventions in the same group of households (n = 64 186 household-days). Conservation habits, attitude-action gaps, principal-agent incongruities, and billing cycles help account for the heterogeneity in response between households, and across time. A non-price behavior modification intervention before the introduction of marginal pricing resulted in a large and significant effect on treated households (33%). The subsequent introduction of marginal volumetric pricing also reduced water use (8%, for previously untreated households). However, this average price effect masks how a large share (21%) of households increased water use, or how a mere 12% of the households accounted for all the aggregate reduction in water use. We investigated such heterogeneous responses as a systematic conservation maximization design question beyond statistical variance in individual responses. We used daily water consumption measurements across three years alongside a household survey to delineate structural and agentic barriers to conservation behavior. Our analysis reveals how combining price and non-price behavioral interventions could hold the key to achieving conservation effects that are both large and persistent.

An Online Randomised Controlled Trial of Price and Non-Price Interventions to Promote Sustainable Food Choices on Food Delivery Platforms

An Online Randomised Controlled Trial of Price and Non-Price Interventions to Promote Sustainable Food Choices on Food Delivery Platforms

A field experiment on workplace norms and electric vehicle charging etiquette

The increase in electric vehicles as a low-carbon mobility option has driven interest from many workplaces and local governments to offer charging services for employees, customers and visitors. However, the lack of incentives to limit over-consumption in shared charging resources has led to congestion issues. In this paper, we use high-frequency data to study two deterrence mechanisms implemented at one of the largest workplace charging programs in the United States. We study both price and nonprice interventions that encourage adoption of workplace norms and charging etiquette for resource sharing in charging stations. To study these mechanisms, we use a dynamic regression discontinuity design to separately identify treatment effects with digital platform data. Our findings provide new evidence that group norms can play an important role in driving behavioral compliance when setting EV access policies. We also find that workplace norms are complements to dynamic pricing policies. We discuss the implications of this data discovery for the effective management of common pool resources in the context of workplace charging and space-constrained environments. This article met the requirements for a gold-gold JIE data openness badge described at http://jie.click/badges

Tackling Energy Poverty Through Behavioral Change: A Pilot Study on Social Comparison Interventions in Social Housing Districts

Behavioral Economics has in recent years played a key role in informing the design of non-price interventions aimed at promoting energy conservation behaviors in residential housing. Some of the most influential contributions of the discipline in an applied setting have centered around the development of norm-based interventions. The success that these interventions have had in specific contexts presents an opportunity to exploit them as tools for tackling a prevalent type of poverty at the EU level: energy poverty. Recent contributions to the literature highlight the role of inefficient energy behavior as a significant driver of this particular type of poverty, which is characterized by an inability to afford the basic energy services necessary to guarantee a decent standard of living. Therefore, the effectiveness of norm-based interventions in vulnerable populations merits further investigation to determine whether this approach can suitably address the behavioral components of energy poverty by promoting efficient energy consumption and conservation efforts. This study reports on a pilot conducted in an exemplary social housing context (located in Bolzano, Italy) with the aim to assess the effectiveness of social comparison interventions in energy vulnerable groups. Our investigated cohort covers an initial small sample of apartments with a large representatives of elderly individuals and other energy-vulnerable groups. Using a design that combines appeals to injunctive and descriptive norms embedded within In-Home Devices (IHD) in recently retrofitted homes, our objective is to set a basis for the assessment of effectiveness of these types of interventions in social housing populations. Our study seeks to provide useful methodological insights to policy makers on how to effectively design behaviorally informed interventions aimed at tackling energy poverty. Despite the current data limitations, our results do seem to suggest that uniformly applied norm-based interventions may have potentially backfiring effects in small-scale implementations. Therefore, they suggest that attention needs to be paid to household composition and pre-existing levels of consumption, when designing behavior-change interventions in these groups.JEL Classification: C93; D03; D04; D12; D19; D91; Q40.

Five Decades of Productivity and Efficiency Changes in World Agriculture (1969–2013)

The present study applied the Färe–Primont index approach to estimate the total factor productivity (TFP) growth of world agriculture, covering the period 1969–2013. Overall, the world agricultural TFP grew at a rate of 0.44% p.a. This growth was mainly contributed to by technological progress and mix efficiency changes, while the contributions of technical efficiency and scale efficiency changes were negligible. TFP growth varied across regions, with South Asia at the top of the list (1.05% p.a.), and East Asia and the Pacific (0.18% p.a.) at the bottom. TFP components exerted differential influences amongst regions. For instance, mix efficiency played a dominant role in Sub-Saharan Africa, the Middle East and North Africa, whereas it was technical efficiency change in Latin America and the Caribbean region. The paper argues for region specific policy interventions emphasizing technical progress through investment in R&D and price and non-price interventions to improve economies of scope and scale of operation in the agricultural sector.

Tackling Energy Poverty Through Behavioral Change: A Pilot Study on Social Comparison Interventions in Social Housing Districts

Behavioral Economics has in recent years played a key role in informing the design of non-price interventions aimed at promoting energy conservation behaviors in residential areas. Some of the most influential contributions of the discipline in an applied setting have centered around the development of norm-based interventions. The success that these interventions have had in specific contexts presents an opportunity to utilize them as tools for tackling a prevalent type of poverty at the EU level: energy poverty. Recent contributions to the literature highlight the role of inefficient energy behavior as a significant driver of this particular type of poverty, which is characterized by an inability to afford the basic energy services necessary to guarantee a decent standard of living. Therefore, the effectiveness of norm-based interventions in vulnerable populations merits further investigation to determine whether this approach can suitably address the behavioral components of energy poverty by promoting efficient energy consumption and conservation efforts. This is particularly imperative when combined with retrofitting innovations, as it can help avoid negative behavioral responses often associated with the implementation of efficiency upgrades, such as rebound effects. This study reports on a pilot conducted in an exemplary social housing context (located in Bolzano, Italy) with the aim to assess the effectiveness of social comparison interventions in energy vulnerable groups. Using a design that combines appeals to injunctive and descriptive norms embedded within In-Home Devices (IHD) in recently retrofitted homes, our objective is to set a basis for the assessment of effectiveness of these types of interventions in social housing populations. Our study seeks to provide useful methodological insights to policy makers on how to effectively design behaviorally informed interventions aimed at tackling energy poverty.

Addressing climate change through price and non-price interventions

Recognizing the importance of the second-best nature of economies, the Stern–Stiglitz report on carbon pricing departed from the recommendation of a single carbon price for all uses at all places and times. This paper provides some of the analytics behind these recommendations. First, I analyze the circumstances in which distributional concerns make desirable a tax or regulation inducing significant reductions in carbon usage in a carbon-intensive sector for which consumers are disproportionately rich. Such policies allow lower carbon prices elsewhere without exceeding carbon emission targets. The cost of the resulting production inefficiency may, under the identified circumstances, be less than the distributional benefits. The paper considers the circumstances in which such differential policies may be best implemented through regulation vs. differential pricing, as well as differential effects on political economy and norm setting. Second, I consider the effect of carbon price trajectories on induced innovation, providing general conditions under which the optimal carbon path should, at least eventually, be falling over time. Finally, I revisit the price-versus-quantity debate and highlight important aspects of the dynamic nature of the problem.

Expanding smoking cessation world-wide.

Commentary to: Evaluating clinical stop-smoking services globally: towards a minimum data set Smoking cessation is the only practicable way to avoid a substantial proportion of tobacco deaths world-wide during the next few decades. Expanding cessation requires higher taxes and non-price interventions, but also much better monitoring of smoking cessation at the clinical and population level. Based on current smoking patterns, with approximately half of young men and one in 10 young women world-wide becoming smokers in early adult life, and most not stopping, annual tobacco deaths will rise from approximately 5 million in 2010 to more than 10 million a few decades from now 1-3, as the young smokers of today reach middle and old age. If current smoking patterns persist, tobacco will kill approximately 1 billion people this century, most in low- or middle-income countries (LMICs). In contrast, there were approximately 100 million deaths from tobacco in the 20th century, most of which were in developed countries 1, 2. The United Nations has endorsed the call for all countries to achieve a 30% reduction in the age-standardized death rates from non-communicable disease between ages 30 and 70 years between 2010 and 2030 4. Widespread cessation of smoking is the most important way to help achieve this goal, as continuing to smoke throughout adult life increases mortality from several major non-communicable diseases (and from tuberculosis) 1-3, 5. Compared to the relatively slow increase in smoking-attributable mortality following the uptake of smoking, the effects of cessation emerge reasonably rapidly. Those who begin smoking in early adult life but stop before age 40 avoid more than 90% of the excess risk during their next few decades of life compared to those who continue to smoke. Even those who stop at age 50 avoid more than half the risk, although some risks persist 6-9. The prevalence of ex-smoking in middle age is a useful measure of the success of tobacco control. In the European Union and the United States, there are now at least as many former as current smokers between the ages of 45 and 64 3, 10. Between 1990 and 2005, France tripled its inflation-adjusted cigarette prices by raising excise taxes substantially, and in so doing halved cigarette consumption 1. Today, the ratio of former smokers to current smokers in France is greater than the European average 10. In contrast, in most LMICs (with the notable exception of Brazil) there are far fewer former than current smokers (Table 1) 3. Tobacco cessation in LMICs has not been well studied. An analysis of the Global Adult Tobacco Surveys 11 found that cessation was associated with common tobacco control tools, namely price and non-price interventions 12. Higher rates of exposure to work-site smoking bans, exposure to anti-smoking media messaging, warning labels and higher cigarette or bidi (in South Asia) prices were also associated with higher odds of recent quit attempts 11. Throughout the world, most former smokers manage to quit unaided, but physician support or telephone-based or internet-based counseling and support can increase the likelihood of success. In motivated individuals, pharmacological treatments can also increase quit rates 3, 12. Skinner and colleagues 13 propose a minimal data set that can be used to guide and monitor cessation programs in clinical populations at the national level. Their proposal applies mainly to populations accessing clinical-based guidance and cessation programs. As such, it is more relevant to cessation support in high- or middle-income countries, where clinical services are better organized than in lower-income countries. Their minimal data set is a useful contribution to considering how to standardize cessation monitoring. In addition to improve monitoring of cessation among clinical patients, complementary efforts to build population-level metrics for cessation are required. Better population-based monitoring would include more effective reporting of ex-smoking prevalence in middle age, including by levels of education or income 14. The reduction in diseases from cessation can also help to accelerate demand for cessation services. However, cessation remains relatively uncommon in most LMICs, and it is therefore difficult to estimate the benefits of reducing specific diseases in these settings. Hence, the current quantified benefits of cessation are quantified mainly in high-income countries 6-9. As cessation rates rise in LMICs, epidemiological studies will be required to quantify their benefits 5. Cessation is the only practicable way to avoid a substantial proportion of tobacco deaths before 2050, as a substantial reduction by 2025 in uptake by adolescents will have its main effect on mortality rates after 2050 1-3, 12. Thus, efforts to expand the monitoring of smoking cessation at the clinical and population levels should be considered global health priorities. None.

EVERY DROP COUNTS: A WATER CONSERVATION EXPERIMENT WITH HOTEL GUESTS

We implement a field experiment with hotel guests to measure the effects of nonprice interventions on water conservation and customer satisfaction. In hotels, guests have no direct pecuniary incentive to conserve water, as consumers do at home, where they pay their own water bills. Because hotels earn greater profits when they manage to convince guests to conserve, guests may be suspicious of a hotel's stated social goal of water conservation. By implementing behavioral interventions that address these challenges, we find that our nudges can induce guests to reduce their water consumption, even when no direct monetary incentive is provided. Using post‐stay customer surveys, we detected no adverse effects on customer satisfaction due to these nudges. (JEL D12, I31, Q41, Q50)

Paddy prices and marketing agencies in India: an empirical analysis of effectiveness of public procurement

Ensuring remunerative prices to farmers through price and non-price interventions by the government is an essential component of sustainable development of agriculture in India. This paper identifies market and non-market factors responsible for higher price realisation by farmers over the government-determined minimum support price (MSP). Our findings show that small and marginal farmers (with less than 2 hectares of land) in the states with low quantum of procurement are more likely to sell below MSP to local private traders. However, the probability of receiving higher prices increases if they shift from private traders to wholesale markets (mandis) and government agencies, and this is much higher in states with higher levels of procurement. The probability of better price realization also improves with increase in land size and access to institutional credit.

Payments or Persuasion: Common Pool Resource Management with Price and Non-price Measures

We use lab experiments to study policies that address common pool resource overuse. We look at a price mechanism, specifically a Pigouvian subsidy, and four non-price interventions. The non-price policies are information alone, information with a normative message, communication alone, and normative messages with communication allowed. In all experiment sessions, no intervention occurs in the first seven and last seven rounds, allowing us to examine the effects of introducing and taking away a policy. The subsidy leads to near-efficient extraction, but surprisingly leads groups that were not over-extracting to also reduce extraction. This over-compliance decreases efficiency, although on net the subsidy is the most efficiency-enhancing intervention. Information provision, communication, normative appeals, and normative appeals combined with communication all reduce over-extraction (though by less than the subsidy) without exacerbating over-compliance; however, the effects of information alone and communication alone are small and not robust. The non-price policies cause a decline in over-extraction of from 0.549 (information) to 11.441 % (normative appeals with communication). These effects are of the same order of magnitude as the effects seen in major field studies of conservation messaging. The subsidy has the worst persistence properties (after the intervention ceases), while normative messages with communication have the best.

Behavioral Economics, Consumption, and Environmental Protection

Behavioral economists have shown that consumers may disregard the long-term, display unrealistic optimism, ignore shrouded attributes, procrastinate, make mistaken judgments about probability, and suffer from “internalities,” which occur when people make decisions that hurt their future selves. Moreover, choice architecture, understood as the social background, is always present, and it can have major consequences for both consumption decisions and environmental outcomes. Small changes in the underlying architecture may have a large impact on consumer behavior, potentially even larger than that of significant economic incentives. Such changes may involve disclosure, warnings, default rules, increased salience, and use of social norms. In the domain of environmental protection, non-price interventions, preserving freedom of choice, have considerable potential.

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.

Capital Formation in Indian Agriculture: A Review

This paper looks at the trends in investment behaviour in Indian agriculture with particular reference to the relationship between private capital formation and public capital formation. It also looks at inter-sectoral terms of trade. Determinants and reasons for the decline of Public capital formation, efficiency of capital use, and the demand for public capital formation in agriculture in the present Indian context. The declining trend of gross fixed capital formation in the eighties was reversed in the nineties mainly due to a good increase in private capital formation despite some decline in public capital formation. The complemantarity between public and private capital formation in agriculture still holds good at the all-India level, as well as, in states, though there seems to have occured some weakening of the inducement effect at the all-India level. Due to differences in composition, private capital cannot substitute public capital in agriculture. The impact of terms of trode on private capital formation increased over time. The efficiency of capital use declined during the nineties. There is higher demand for public capital formation in the present Indian context. The failure of the favouruble terms of trade to improve agricaltural production. productivity and thereby employment, the need for improving dry land agriculture and increased needs for research, extension and infrastructure development efforts in the liberalised trade regime; make non-price interventions with higher public investment an urgent need.

Global and regional estimates of the effectiveness and cost-effectiveness of price increases and other tobacco control policies.

The objective of this study was to provide conservative estimates of the global and regional effectiveness and cost-effectiveness of tobacco control policies. Using a static model of the cohort of smokers alive in 1995, we estimated the number of smoking-attributable deaths that could be averted by: (1) price increases, (2) nicotine replacement therapy (NRT), and (3) a package of non-price interventions other than NRT. We calculated the cost-effectiveness of these policy interventions by weighing the approximate public-sector costs against the years of healthy life saved, measured in disability-adjusted life years, or DALYs. Even with deliberately conservative assumptions, tax increases that would raise the real price of cigarettes by 10% worldwide would prevent between 5 and 16 million tobacco-related deaths, and could cost 3-70 US dollars per DALY saved in low-income and middle-income regions. NRT and a package of non-price interventions other than NRT are also cost-effective in low-income and middle-income regions, at 280-870 US dollars per DALY and 36-710 US dollars per DALY, respectively. In high-income countries, price increases were found to have a cost-effectiveness of 83-2771 US dollars per DALY, NRT 750-7206 US dollars per DALY and other non-price interventions 696-13,924 US dollars per DALY. Tobacco control policies, particularly tax increases on cigarettes, are cost-effective relative to other health interventions. Our estimates are subject to considerable variation in actual settings; thus, local cost-effectiveness studies are required to guide local policy.