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Utilities Turn to Peer Pressure to Nudge Customers

Cut your energy use to keep up with Joneses

By Kevin Spak,  Newser Staff

Posted Sep 14, 2009 8:57 AM CDT
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(Newser) – Would you be more likely to rein in your energy use if you knew it would save money, or if you knew your neighbors used less? Traditional economists assume the former—that consumers do what is in their best interest—but companies are ditching that notion in favor of behavioral economics, with tangible returns, the Wall Street Journal reports. When the Sacramento Municipal Utility district, for example, recently began telling customers how their energy use compared to their neighbors, consumption fell 2%.

“Taking a behavioral approach completely changes the way you view the consumer,” says one economics professor. Though marketers have long looked for non-economic ways to motivate consumers, businesses are now approaching the topic more scientifically; the Sacramento experiment was based on a psychology study that showed consumers were more likely to cut consumption to keep up with the Joneses than to save money.

GlowCaps, seen here, send emails to your doctor telling him how conscientious you've been. The behavioral economics theory: You're more likely to take the medicine if you think someone's watching.
GlowCaps, seen here, send emails to your doctor telling him how conscientious you've been. The behavioral economics theory: You're more likely to take the medicine if you think someone's watching.   (Photo: Business Wire)
Consumers are more likely to be energy efficient if they think everyone else is doing it.
Consumers are more likely to be energy efficient if they think everyone else is doing it.   (AP Photo/Carolyn Kaster, file)
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COMMENTS
Showing 3 of 15 comments
WallyEFunk
Sep 14, 2009 11:10 AM CDT
@ Tim , While I was checking on the mercury problems in the bulbs. I found this about coal , In areas with coal-fired power stations, the use of CFLs saves on mercury emissions when compared to the use of incandescent bulbs. This is due to the reduced electrical power demand, reducing in turn the amount of mercury released by coal as it is burned.
WallyEFunk
Sep 14, 2009 11:01 AM CDT
Yes .some of those bulbs suck. I'm getting evan though saving the recipt ,with the " spares " and returning them. And about the mercury,can't figure out why so many governments are pushing them ? Has anyone check to find out there " local landfills"?
WallyEFunk
Sep 14, 2009 10:56 AM CDT
It not the amount it's the service. like it cost everyone a minimun of 30.00 a month to get the water to the door. water is free until U use past a certain amount.

 
marketing • economics • behavioral ecnonomics • energy conservation

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