Date of Award
Doctor of Philosophy in Environmental and Natural Resources Economics
Environmental & Natural Resource Economics
The US residential sector consumed over 20 quadrillion Btu of energy in 2015, costing households billions of dollars in energy bills in addition to negative environmental and health externalities from conventional energy generation. Reducing energy consumption and promoting energy efficiency are critical for controlling costs, minimizing negative environmental impacts, and ensuring security of energy supply. Regulators and policy makers rely on a suite of strategies to promote energy efficiency and conservation. These strategies vary in degree of control over individual freedom of choice, effectiveness and impact, and political and practical feasibility. In this dissertation, I investigate the effects of three strategies to promote energy efficiency.
In the first manuscript, I examine the effects of a time-varying residential electricity rate structure. One challenge of promoting energy efficiency is that the true marginal costs of electricity are not passed onto the majority of consumers who are charged a flat rate for electricity. I exploit quasi-random assignment of TOU rates and use a regression discontinuity framework to identify the causal effects of TOU pricing on four outcomes over the twelve months following treatment for high-use households. Though microeconomic theory predicts households shift consumption from peak to off peak hours, I find only suggestive evidence that this is the case. I find a decrease in level of peak consumption six to eight months following treatment along with a decrease in total consumption, suggesting energy conservation rather than load deferment and possibly indicating spillover effects of energy conservation into off-peak hours. I find evidence for decreases in electricity bill amounts, consistent with both more favorable marginal prices for households with already-low peak proportion and decreased consumption.
In the second manuscript, I evaluate the effectiveness of in-school energy education lessons. Despite the prevalence of such education, there is little empirical evidence to support the efficacy of these programs on tangible outcomes outside of school. Using a differences-in-differences approach, I find evidence for short-term reductions on the order of eight percent in electricity use the day of a lesson regarding reducing phantom electric loads, with evidence of deferment in electricity use rather than reduction. I find no effect of lessons on energy pathways or wind energy on the days of the lessons. Findings show that energy education is potentially a valuable tool for encouraging energy efficiency and conservation, though the timing of lessons and curriculum content are critical to optimize treatment effects.
In the third manuscript, I explore two facets of choice architecture that can encourage more energy-efficient behavior intentions. One challenge of promoting energy-efficient behavior change is status quo bias: limiting energy use often requires sacrificing convenience and comfort now and in the future. Using experimental data, I explore what temporal frame (e.g. daily, monthly, or yearly) minimizes status quo bias and encourages energy-efficient choices. Results suggest individuals are most willing to adopt energy-efficient behaviors when the cost savings are framed on a monthly basis, relative to daily and yearly frames. I investigate whether cognitive fluency – the perceived ease of processing information – could be an underlying mechanism. I find suggestive evidence that individuals are indeed most fluent with energy costs framed on a monthly basis, possibly because most individuals receive monthly energy bills. When individuals are faced with energy costs in relatively disfluent frames (daily and yearly), I find that energy efficiency intentions are greatest when given a context for total energy spending in a matching frame.
Gill, Carrie A., "Encouraging Energy Efficiancy: Pricing, Education, and Framing" (2017). Open Access Dissertations. Paper 581.