8. Helping The Environment Flashcards
What is the standard economic approach to global warming?
Carbon tax or subsidies for environmentally friendly technologies
Problems with carbon tax and subsidies when dealing with carbon emissions?
-hard to know efficient levels
-carbon markets aren’t popular
-tax increases even more unpopular
-subsidies for clean energy (such as solar) is often too expensive in an age of austerity and cash-strapped governments
Describe set up of typical public good game
-groups of 4
-everybody gets 20 money units
-describe how many to invest in group pot
-the experimenter increases every MU in the pot by 1.6 and distributed evenly among group members
Give an example of conditional cooperation in the field. Frey & Meier (2004)
-each semester students at Zurich have to decide whether to donate to two social funds which have character of public good.
-2500 students randomly selected for field exp
-2000 students received info that 64%/46% contributed to the two funds in the past
-500 students were asked about their expectations of how others will behave
Results of Frey & Meier 2004
-students are more likely to contribute the higher the expectation of average group behaviour. However, no causal inference possible
-students who in the past never or always contributed don’t react to treatment but the occasional contributors contribute more in high than low
Summary of Rustagi Et al 2010
-Forest management projects in Kenya
-n=49 groups
-Use a measure of conditional cooperation by Fischbacher, Gachter, Fehr 2001 (strategy method)
-Most groups are conditional cooperators with a lot of free riders too
Describe set up of field exp on power of social norms by Schultz Et al 2009
-field exp on energy conservation with 290 households
-meter readings left feedback at door:
Either
Only descriptive feedback about electricity use relative to neighbours
Or descriptive feedback plus happy or sad face (injunctive norm)
Results of exp on power of social norms Schultz Et al 2009
-descriptive feedback can backfire on those who are performing above average
-combination with injunctive norm can help
-this effect lasts in long term too
How does Allcott 2011 use the power of social norms by Schultz Et al 2009
-Allcott does study on OPOWER
-nearly 600,000 households with residential customers with sufficient electricity bill history
-first part of letter is social comparison module which highlights descriptive norm and injunctive norm
-control doesn’t receive report
-treatment group report frequency was also randomised
Results of Allcott Et al 2011
-mean ATE=-2.03% which is 0.62kWh, equivalent to leaving on air con for 37 mins
-wide variation in savings by state 0.81% to 2.55%
-a 11-20% increase in price would be needed to make the same decrease in usage in short run, 5.2% in long run
-saving rate is highest in summer and winter
-the higher the baseline usage the greater the treatment effect
-important role for normative messages but categories of normative feedback don’t have discontinuous effect
Describe set up of Jachimowicz Et al 2009
-survey for N=2001 to test for 1st and 2nd order beliefs about environment
-questions scored on a 7 point scale, 1 (not at all) to 7 (very much)
-answers aggregated at state level
-dependent variable: % energy saved in treatment group relative to control group
Results of Jachimowicz Et al 2008
-1st order beliefs are higher than 2nd order beliefs in all 27 states
- 2nd order beliefs predicted energy saving in 211 RCTs, 1st order beliefs didn’t. Caveat, only correlational. Experimental causal evidence needed
Describe experiment on the causal role of 2nd order beliefs
-exp run on MTurk (N=561). Participants told scenario where they receive energy bill and they use 28% more than neighbours.
-participants randomly allocated to low or high 2nd order belief condition
-Low/High “your county is in 11th/89th percentile of energy conservation in US”
-dependent variable: “How willing are you to reduce your energy use?” 1-7
Results of the causal role of 2nd order beliefs on MTurk
“How willing are you to reduce your energy use?”
High: 5.83
Low: 5.33
On a scale of 1-7
P<0.001
Robust if controlling for first order beliefs
Describe set up of Yoeli Et al (2013)
-Demand Response Programme (DRP) voluntary programmes where people allow their utility company to restrict their energy consumption during peak hours- features of a public good dilemma
-participants are residents of 15 homeowner associations
-sign up sheet posted on notice board next to mailboxes
-random treatment allocation where sign ups are observable or anonymous
