How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment

Research output: Chapter in Book/Report/Conference proceedingPaper in conference proceeding

Standard

How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment. / Bager, Simon; Mundaca, Luis.

38th International Association for Energy Economics (IAEE) Conference. International Association for Energy Economics, 2015. p. 1.

Research output: Chapter in Book/Report/Conference proceedingPaper in conference proceeding

Harvard

Bager, S & Mundaca, L 2015, How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment. in 38th International Association for Energy Economics (IAEE) Conference. International Association for Energy Economics, pp. 1, 38th International Association for Energy Economics (IAEE) International Conference, Antalya, Turkey, 2015/05/25.

APA

Bager, S., & Mundaca, L. (2015). How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment. In 38th International Association for Energy Economics (IAEE) Conference (pp. 1). International Association for Energy Economics.

CBE

Bager S, Mundaca L. 2015. How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment. In 38th International Association for Energy Economics (IAEE) Conference. International Association for Energy Economics. pp. 1.

MLA

Bager, Simon and Luis Mundaca "How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment". 38th International Association for Energy Economics (IAEE) Conference. International Association for Energy Economics. 2015, 1.

Vancouver

Bager S, Mundaca L. How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment. In 38th International Association for Energy Economics (IAEE) Conference. International Association for Energy Economics. 2015. p. 1

Author

Bager, Simon ; Mundaca, Luis. / How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment. 38th International Association for Energy Economics (IAEE) Conference. International Association for Energy Economics, 2015. pp. 1

RIS

TY - GEN

T1 - How smart are electricity users with ‘Smart Metering’? A Behavioural Economics experiment

AU - Bager, Simon

AU - Mundaca, Luis

PY - 2015

Y1 - 2015

N2 - The purpose of this paper is to examine how behavioural biases affect consumers’ response to energy-use information provided through smart meters (SM). We take insights from behavioural economics and carry out two real-life experiments with SMs and electricity users. The experiments were conducted in Copenhagen (Denmark) to identify and assess the potential of two economic behavioural biases, salience and loss aversion. The results of the first experiment (i.e. installation of SM without further intervention) generally aligned with electricity use reductions found in previous research, and indicate that it may be reasonable to expect a reduction in electricity use in the medium-term (weeks/months) of ~5-7% approximately. Results of the second experiment (i.e. introduction of SM with and without intervention) show that subjecting participants to loss aversion and salience seems to affect their behaviour toward electricity use, as the intervention group reduced their consumption roughly twice as much as the reference group. With due limitations, the results suggest that the delivery of information to energy users needs to take into account not only its pure provision, but how it is designed, framed and presented. At all events, the results and reviewed studies strongly suggest that increased energy efficiency and energy conservation need to be addressed with a mix of policies – not only information schemes or the provision of feedback alone.

AB - The purpose of this paper is to examine how behavioural biases affect consumers’ response to energy-use information provided through smart meters (SM). We take insights from behavioural economics and carry out two real-life experiments with SMs and electricity users. The experiments were conducted in Copenhagen (Denmark) to identify and assess the potential of two economic behavioural biases, salience and loss aversion. The results of the first experiment (i.e. installation of SM without further intervention) generally aligned with electricity use reductions found in previous research, and indicate that it may be reasonable to expect a reduction in electricity use in the medium-term (weeks/months) of ~5-7% approximately. Results of the second experiment (i.e. introduction of SM with and without intervention) show that subjecting participants to loss aversion and salience seems to affect their behaviour toward electricity use, as the intervention group reduced their consumption roughly twice as much as the reference group. With due limitations, the results suggest that the delivery of information to energy users needs to take into account not only its pure provision, but how it is designed, framed and presented. At all events, the results and reviewed studies strongly suggest that increased energy efficiency and energy conservation need to be addressed with a mix of policies – not only information schemes or the provision of feedback alone.

KW - Behavioural Economics

KW - Energy Efficiency

KW - Households

KW - EU energy policy

KW - Smart Meters

M3 - Paper in conference proceeding

SP - 1

BT - 38th International Association for Energy Economics (IAEE) Conference

PB - International Association for Energy Economics

ER -