DP11480 Overcoming Salience Bias: How Real-Time Feedback Fosters Resource Conservation
|Author(s):||Kathrin Degen, Elgar Fleisch, Lorenz Goette, Rafael Lalive, Thorsten Staake, Vojkan Tasic, Verena Tiefenbeck|
|Publication Date:||August 2016|
|Keyword(s):||decision making, energy conservation, environmental behavior, randomized controlled trials, water conservation|
|JEL(s):||C93, D03, H41|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=11480|
Inattention and imperfect information bias behavior toward the salient and immediately visible. This distortion causes costs to individuals, the organizations they work in, and soci- ety at large. We show that an effective way to overcome this bias is making the implications of one's behavior salient in real time, while individuals can directly adapt. In a large-scale field experiment, we gave participants real-time feedback on the resource consumption of a daily, energy-intensive behavior (showering). We find that real-time feedback reduced re- source consumption for the target behavior by 22%. At the household level, this led to much larger conservation gains in absolute terms than conventional policy interventions that provide aggregate feedback on resource use. High-baseline users displayed a larger conservation effect, in line with the notion that real-time feedback helps eliminate "slack" in resource use. The approach is cost-effective, technically applicable to the vast majority of households, and generated savings of 1.2 kWh per day and household, which exceeds the average energy use for lighting.The intervention also shows how digitalization in our every- day lives makes information available that can help individuals overcome salience bias and act more in line with their preferences.