Full Title: The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation
Author(s): Hunt Allcott and Todd Rogers
Publisher(s): N/A
Publication Date: October 1, 2012
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Description (excerpt):
Interventions to affect repeated behaviors, such as smoking, exercise, or workplace effort, can often have large short-run impacts but uncertain or disappointing long-term effects. We study one part of a massive set of randomized control trials in which home energy reports containing personalized feedback, social comparisons, and energy conservation information are being repeatedly mailed to more than Öve million households across the United States. We show that treatment group households reduce energy use within days of receiving each of their Örst few reports, but these initial responses decay rapidly in the months between reports. This cyclical pattern of stimulus and response attenuates as reports are repeatedly delivered and households form a new “capital stock” of physical capital or consumption habits. When a randomly-selected group of households has reports discontinued after two years, the treatment effects decay much more slowly than they had between the initial reports. We show how assumptions about long- run persistence can significantly impact program adoption decisions, and we illustrate how program design that accounts for this capital stock formation process can significantly improve cost effectiveness.