Temporal orientation and energy saving investments: a survey experiment
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Principal investigators:
Mariateresa Silvi
Universitat Autònoma de Barcelona
Email: mariateresa.silvi@uab.cat
Homepage:
https://sites.google.com/view/mariateresasilvi/home
Emilio Padilla Rosa
Universitat Autónoma de Barcelona
Email: emilio.padilla@uab.es
Homepage:
https://gent.uab.cat/epadilla/content/emilio-padilla-rosa
Sample size: 2010
Field period: 03/24/2020-09/30/2020
Abstract
Most environmental decisions involve intertemporal trade-offs, in that they require foregoing immediate gratification for the sake of future environmental quality. One such example is investing in energy efficiency, which entails an initial upfront cost in exchange for a future stream of energy and economic savings. Our experiment explores the role of individual temporal preferences in the decision to invest in energy conservation. We report results from a study on a nationally-representative sample of 2010 United States adults. Participants chose between appliances that differed solely in price and operating costs. We manipulated the salience of energy costs and primed participants with future-oriented messages. Our treatments increased energy-efficient choices by 24 percentage points compared with the status-quo scenario. Present-oriented individuals are less likely to purchase energy-efficient appliances but loss-framed messages that highlight the opportunity cost of inefficient appliances diminish the effect of impatience on refrigerators choice.
Hypotheses
- H1. Present-oriented individuals are more likely to choose energy inefficient appliances.
- H2: Communicating the opportunity-cost of buying an inefficient appliance increases energy-efficient choices.
- H3: The effectiveness of communicating the opportunity-cost is heterogenous across individuals based on their temporal orientation.
Experimental Manipulations
Participants chose between two refrigerators, an energy efficient one—here in the article referred to as green—and an otherwise identical, less efficient alternative—gray. We defined the context as a refrigerator replacement decision and the choice as being between two appliances that the participant had hypothetically pre-selected among various models. Participants were told that the two refrigerators differed solely in price and energy consumed and that they were otherwise equal. The experiment followed a 2 × 3 factorial between-subjects design: one factor defining alternative framings of the appliances' energy requirements and the other factor pertained to the number of attributes shown for each refrigerator.
Outcomes
Our outcome variables are the percentage of individuals choosing the energy-efficient appliance in each condition and the resulting estimated kWh consumption.
Summary of Results
Present-oriented individuals are less likely to invest in energy efficiency (EE). EE purchases increase when relative lifetime losses are highlighted. Cost savings information neutralizes political resistance to EE. It also persuades poorer households of the benefits of EE investments. Temporally oriented nudges can reduce the effect of impatience on EE.
References
Mariateresa Silvi, Emilio Padilla Rosa, Reversing impatience: Framing mechanisms to increase the purchase of energy-saving appliances, Energy Economics, Volume 103, 2021,105563, ISSN 0140-9883, https://doi.org/10.1016/j.eneco.2021.105563.