Asymmetric Effects of Non-Pecuniary Signals on Search and Purchase Behavior for Energy-Efficient Durable Goods

58 Pages Posted: 19 Dec 2016 Last revised: 7 Mar 2021

See all articles by James Scott Holladay

James Scott Holladay

University of Tennessee

Jacob S. LaRiviere

University of Tennessee, Chattanooga

David Novgorodsky

University of Chicago

Michael Price

Georgia State University - Department of Economics

Date Written: December 2016

Abstract

We report the results of a field experiment where we exogenously vary the use of social comparisons "nudges" and subsidies for participation in an in-home energy audit program, and follow subjects through to the subsequent purchase of durable goods. We therefore can compare the causal effect of financial incentives and nudges along two margins, audits, which we liken to search, and purchase of durables. Using data on nearly 100,000 households, we document an asymmetry; nudges increase audits, but lead to lower rates of purchase. We find no evidence of a differential response for those offered a financial incentive. These differences suggest heterogeneity in the motives of the marginal consumer induced by nudges versus prices.

Suggested Citation

Holladay, James Scott and LaRiviere, Jacob S. and Novgorodsky, David and Price, Michael, Asymmetric Effects of Non-Pecuniary Signals on Search and Purchase Behavior for Energy-Efficient Durable Goods (December 2016). NBER Working Paper No. w22939, Available at SSRN: https://ssrn.com/abstract=2887201

James Scott Holladay (Contact Author)

University of Tennessee ( email )

508 Stokely Management Center
Knoxville, TN 37996-0550
United States

Jacob S. LaRiviere

University of Tennessee, Chattanooga ( email )

Department of Philosophy & Religion (#2753)
Chattanooga, TN 37403-2598
United States

David Novgorodsky

University of Chicago

Michael Price

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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