Spillovers from Behavioral Interventions: Experimental Evidence from Water and Energy Use
Katrina Jessoe, Gabriel Lade, Frank J. Loge, Edward S. Spang
Abstract
This paper provides experimental evidence that behavioral interventions spill over to untreated sectors by altering consumer choice. We use a randomized controlled trial and high-frequency data to test the effect of social norms messaging about residential water use on electricity consumption. Messaging appears to induce a small reduction in summertime electricity use. Empirical tests and household survey data support the hypothesis that this nudge alters electricity choices. An engineering simulation suggests that complementarities between appliances that use water and electricity explain roughly a quarter of the electricity reduction. Incorporating the cross-sectoral spillover increases the net benefits of the intervention substantially.