Document Type
Working Paper
Date of This Version
6-1-2014
Abstract
This paper develops a theoretical model of consumer demand for an energy conservation program that involves non-binding, self-set goals. We present evidence from a Northern Illinois goal-setting program, aimed at reducing residential electricity consumption, that is difficult to reconcile with standard preferences and is broadly consistent with a model of presentbiased consumers with reference-dependent preferences. We find that the need for commitment is correlated with program adoption, higher pre-adoption consumption, and lower responsiveness to goals. Consumers choosing realistic goals persistently save substantially more, achieving savings of nearly 11%, than those choosing very low or unrealistically high goals.
Working Paper Number
1403
Recommended Citation
Harding, Matthew and Hsiaw, Alice, "Goal Setting and Energy Conservation" (2014). Economics Department Working Papers. Paper 166.
https://crossworks.holycross.edu/econ_working_papers/166