The Impact of Moral Persuasion and Dynamic Pricing on Energy Conservation in Japan

Last registered on November 06, 2016
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Pre-Trial

Trial Information

General Information

Title
The Impact of Moral Persuasion and Dynamic Pricing on Energy Conservation in Japan
RCT ID
AEARCTR-0001670
Initial registration date
November 06, 2016

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
November 06, 2016, 10:25 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Japan
Region
East Asia

Primary Investigator

Name
Koichiro Ito
Affiliation
University of Chicago, Harris School of Public Policy
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Other Primary Investigator(s)

PI Name
Makoto Tanaka
PI Affiliation
National Graduate Institute for Policy Studies
Contact Investigator
PI Name
Takanori Ida
PI Affiliation
Kyoto University
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2012-07-01
End date
2014-12-31
Keywords
Environment & Energy
Additional Keywords
Moral suasion, Dynamic pricing, Energy conservation
JEL code(s)
Secondary IDs
Abstract
Firms and governments often use moral suasion and economic incentives to influence intrinsic and extrinsic motivations for various economic activities. To investigate the persistence of such interventions, we randomly assigned households to moral suasion and dynamic pricing that stimulate energy conservation during peak demand hours. Using household-level consumption data for 30-minute intervals, we find significant short-run effects of moral suasion, but the effects diminished quickly after repeated interventions. Economic incentives produced larger and persistent effects, which induced habit formation after the final interventions. While each policy produces substantial welfare gains, economic incentives provide particularly large gains when we consider persistence.
External Link(s)
J-PAL Evaluation Summary

Registration Citation

Citation
Ida, Takanori, Koichiro Ito and Makoto Tanaka. 2016. "The Impact of Moral Persuasion and Dynamic Pricing on Energy Conservation in Japan." AEA RCT Registry. November 06. https://doi.org/10.1257/rct.1670-1.0
Former Citation
Ida, Takanori, Koichiro Ito and Makoto Tanaka. 2016. "The Impact of Moral Persuasion and Dynamic Pricing on Energy Conservation in Japan." AEA RCT Registry. November 06. https://www.socialscienceregistry.org/trials/1670/history/11653
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Experimental Details

Interventions

Intervention(s)
Control Group: The households in this group received an advanced electricity meter,
an in-home display, and the participation reward. Other than that, this group did not receive any treatment.

Moral Suasion Group: The households in this group received an advanced electricity meter, an in-home display, and the participation reward. In addition, this group received "moral suasion for energy conservation;" they were encouraged to voluntarily conserve energy.

Economic Incentive Group: The households in this group received an advanced
electricity meter, an in-home display, and the participation reward. In addition, this group received an "economic incentive for energy conservation;" the price they were charged for energy increased during peak hours.
Intervention Start Date
2012-07-01
Intervention End Date
2013-12-31

Primary Outcomes

Primary Outcomes (end points)
Household-level electricity consumption, Durable Goods Investments, Behavioral Changes in Lifestyles
Primary Outcomes (explanation)
Energy consumption was measured in 30 minute intervals.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We consider two policy interventions that are most widely used by policymakers in practice. The first intervention is moral suasion, by which policymakers attempt to influence intrinsic motivation for various economic activities. The second intervention is an economic incentive, by which policymakers attempt to influence extrinsic motivation based on standard demand theory. Our main outcome variable is household-level electricity consumption for every 30 minutes. We began by randomly assigning households to one of 3 groups: 1) a moral suasion group, 2) an economic incentive group, and 3) a control group. On peak demand days in summer and winter, we delivered day-ahead and same-day notifications about treatments. For electricity usage during peak demand hours on peak demand days, the moral suasion group received a message requesting voluntary energy conservation with no economic incentives. The economic incentive group was charged high electricity prices during the peak demand hours. We repeated these interventions to analyze hot versus cold decision-making among the groups. The repeated interventions allowed us to estimate how treatment effects change between the first intervention and subsequent interventions. Moreover, we collected electricity usage data after the final interventions to examine potential habit formation. Finally, we conducted a detailed follow-up survey to investigate the mechanism behind our findings.
Experimental Design Details
Randomization Method
Customers were sorted by randomly generated numbers and assigned to one of the four groups.
Randomization Unit
Household
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
691 households
Sample size: planned number of observations
691 households
Sample size (or number of clusters) by treatment arms
Control: 153 households
Moral Suasion Group: 154 households
Economic Incentive Group: 384 households
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
December 31, 2013, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
April 01, 2014, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
682 households
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
Final Sample Size (or Number of Clusters) by Treatment Arms
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
The Persistence of Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand
Citation
Ito, Koichiro, Takanori Ida, and Makoto Tanaka. "The Persistence of Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand." Working Paper, April 2015.
URL
https://www.povertyactionlab.org/sites/default/files/publications/4195_MoralSuasion%20and%20Incentives_Ito_NBERApril2015.pdf

Reports & Other Materials