Hyperbolic Discounting in Energy Consumption

Last registered on November 01, 2018

View Trial History

Pre-Trial

Trial Information

General Information

Title

Hyperbolic Discounting in Energy Consumption

RCT ID

AEARCTR-0003503

Initial registration date

October 29, 2018

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 01, 2018, 8:51 PM EDT

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

Locations

Country

Germany

Region

Primary Investigator

Name

Madeline Werthschulte

Affiliation

ZEW Mannheim

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2018-10-30

End date

2018-11-23

Keywords

Environment & Energy

Additional Keywords

JEL code(s)

Secondary IDs

Abstract

In a laboratory environment, we analyze the role of payment structures in energy consumption. Energy use is billed after consumption has taken place, such that a dynamic trade-off between consumption and payment of the good emerges. Such “bill-me-later”-systems give rise to uncertainty, inattention and (hyperbolic) discounting of future costs. This research focusses on the discounting of costs, by, holding information on and saliency of costs constant, randomly changing only the timing of the energy bill.
Building on recent laboratory and field experiments on present bias, we adapt the common setting with immediate effort costs and delayed benefits to a setting with immediate benefits and delayed costs. The benefits and costs are framed as consuming light and paying an energy bill. The control scenario is billing one week after consumption has taken place, the treatment scenario is billing immediately after consumption. This change in the payment structure allows us to estimate the influence of (hyperbolic) discounting on energy consumption.

External Link(s)

Registration Citation

Citation

Werthschulte, Madeline. 2018. "Hyperbolic Discounting in Energy Consumption." AEA RCT Registry. November 01. https://doi.org/10.1257/rct.3503-1.0

Former Citation

Werthschulte, Madeline. 2018. "Hyperbolic Discounting in Energy Consumption." AEA RCT Registry. November 01. https://www.socialscienceregistry.org/trials/3503/history/36623

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

In the control scenario, energy costs are subtracted from the second payment, i.e. one week after consumption. In the treatment scenario, energy costs are subtracted from the first payment, i.e. immediately after consumption. We only vary the timing of paying the energy costs.

Intervention Start Date

2018-10-30

Intervention End Date

2018-11-22

Primary Outcomes

Primary Outcomes (end points)

Absolute amount of "light" consumed (in seconds), relative share of "light" consumed (in percentage, i.e. light seconds divided by total seconds needed for all tasks)

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

We employ a within and between design in a longitudinal study over four dates. On dates one and three, subjects do real effort tasks in the laboratory and receive a first payment. On dates two and four, they just collect a second payment. There is always a week distance between each date. We randomize the timing structure, meaning that a group A experiences the control scenario on dates one and two and the treatment scenario on dates three and four, and a group B experiences the treatment scenario on dates one and two and the control scenario on dates three and four. This allows us to compare decisions between subjects on dates one and two and within subjects across all four dates.
The real effort task is designed to reproduce the energy consumption decision. The task is to find a certain letter in a table full of letters. The letters are shown with weak contrast (i.e. black letters on a grey background). For each task, subjects can decide the amount of “light” they want to consume. Switching on the light increases the contrast and therefore eases the task. We count the seconds light is switched on. The number of tasks is fixed. A price for each second of light is charged and subtracted from either the first or the second payment.

Experimental Design Details

Randomization Method

Within-session randomization done by a computer.

Randomization Unit

Individual.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

200 individuals (see below).

Sample size: planned number of observations

In a non-incentivized pre-test we measured a standard deviation for light consumed (in seconds) of 112. Assuming a treatment effect of 10%, as measured in comparable studies, the required sample size for a between-subjects analysis is 200 subjects (power: 0.8, alpha: 0.05).

Sample size (or number of clusters) by treatment arms

100 individuals in group A and 100 individuals in group B.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB