Harvard University

To study behavioral factors that influence consumers' energy utilization and efficiency choices

  • Amount $293,299
  • City Cambridge, MA
  • Investigator Sendhil Mullainathan
  • Year 2010
  • Program Economics
  • Sub-program Economic Institutions, Behavior, & Performance

Engineers have been writing for years about how simple steps like home weatherization can save consumers considerable money. Relatively few consumers, however, take such simple, cost-saving steps. Among economists, this puzzling phenomenon is sometimes called the "Energy Efficiency Paradox." This grant will support the work of Harvard economist Sendhil Mullainathan and the "ideas42" research group he leads, as they pursue six related research projects, all grounded in empirical observation, studying how people make energy consumption and utilization decisions and what policy-relevant conclusions might be drawn from what is learned. The results may be surprising. In previous work with the company OPOWER, for example, Mullainathan's group found that giving consumers information about their neighbors' energy use had significantly greater impact than just providing information about their own energy consumption. Utility companies and federal agencies are presently spending huge amounts of money on energy efficiency and metering programs based on very little in the way of theory, evidence, or experiment. Together with a project manager and several research assistants funded through this grant, the team of outstanding economists, energy experts, psychologists, and marketers that make up "ideas42" are poised to make important contributions to our understanding of the "Energy Efficiency Paradox" and other apparent behavioral anomalies that can be observed when consumers make energy-related decisions.

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