Why Does Real-Time Information Reduce Energy Consumption?

A number of studies have estimated how much energy conservation is achieved by providing households with real-time information on energy use via in-home displays. However, none of these studies tell us why real-time information changes energy-use behavior. We explore the causal mechanisms through which real-time information affects energy consumption by conducting a randomized-control trial with residential households. The experiment disentangles two competing mechanisms: (i) learning about the energy consumption of various activities, the “learning effect”, versus (ii) having a constant reminder of energy use, the “saliency effect”. We have two main results. First, we find a statistically significant treatment effect from receiving real-time information. Second, we find that learning plays a more prominent role than saliency in driving energy conservation. This finding supports the use of energy conservation programs that target consumer knowledge regarding energy use.

Published version: Lynham, J., Nitta, K., Saijo, T., & Tarui, N. (2016). Why does real-time information reduce energy consumption? Energy Economics. http://doi.org/http://dx.doi.org/10.1016/j.eneco.2015.11.007

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