Real-time information feedback delivered via technology has been reported to produce up to 20 percent declines in residential energy consumption.There are however large differences in estimates of the effect of real-time feedback technologies on energy use. In this study, we conduct a field experiment to obtain an estimate of the impact of a real-time feedback technology. Access to feedback leads to an average reduction in household electricity consumption of 5.7 percent. Significant declines persist for up to four weeks. In examining time of day reduction effects, we find that the largest reductions were observed initially at all times of the day but as time passes, morning and evening intervals show larger reductions. We find no convincing evidence that household characteristics explain heterogeneity in our treatment effects; we examine demographics, housing characteristics and psychological variables.

The ENERGY STAR certification is a voluntary labeling that favors the adoption of energy efficient products. In the US appliance market, the label is a coarse summary of otherwise readily accessible information. Using micro-data of the US refrigerator market, I develop a structural demand model and find that consumers respond to certification in different ways. Some consumers have a large willingness to pay for the label, well beyond the energy savings associated with certified products; others appear to pay attention to electricity costs, but not to the certification, and still others appear to be insensitive to both electricity costs and ENERGY STAR. The findings suggest that the certification acts as a substitute for more accurate, but complex energy information. Using the structural model, I find that the opportunity cost of having imperfectly informed consumers in the refrigerator market ranges from $12 to $17 per refrigerator sold.An online appendix is available at: http://www.nber.org/data-appendix/w20019 information acquisition (e.g., Stigler 1961; McCall 1965; Gabaix et al. 2006). In the same spirit as Sallee (2013), I use a theory of rational attention allocation (Sims 2003) to model why consumers may rely on different pieces of energy information.The estimation is carried on a large sample of transactions of the US refrigerator market. In addition to rich variation in prices, electricity costs, and financial incentives for purchasing certified products, the sample period includes two natural experiments that provide variation in labeling.The structural model exploits this variation to recover consumer preferences for the ES label, marginal utility of income, discount rate, and propensity to take advantage of rebates. The crucial feature of the model is, however, to recover heterogeneity in the way consumers rely on energy 3 information. I find that some consumers rely on the certification and value the label itself well beyond the energy savings associated with certified products, but others rely on a measure of electricity costs and do not value the label highly. A non-negligible fraction of consumers also appears to neither value the certification nor consider electricity costs in their purchase decisions, and this fraction is much larger for lower income households.The results from the structural estimation are supported by alternative estimators that account for heterogeneity in a more flexible manner. I first show using a simple conditional logit that the coefficients on the ES label and electricity costs are inversely correlated with several demographic variables. In particular, richer and smaller households, where the head is older and educated respond more to electricity costs, but not so much to the label. Using an approach proposed by Fox et al. (2011), I recover a nonparametric join distribution of the coefficients on the ES label and electricity costs, which also shows a clear negative correlation between the two coefficients.Altogether, the data suggest that the certification acts as a sub...

I study how consumers respond to competing pieces of information that differ in their degree of complexity and informativeness. In particular, I study the choice of refrigerators in the United States, where a mandatory disclosure labelling program provides detailed information about energy cost, and a certification labelling program provides a simple binary-star rating related to energy use. I find that the coarse certification may help some consumers to pay attention to energy information, but for others, it may crowd out efforts to process more accurate, but complex, energy information. The effect of the certification on overall energy use is thus ambiguous. * ETH Zürich, Switzerland; shoude@ethz.ch. I am indebted to

We investigate how moral hazard problems can cause sub-optimal investment in energy efficiency, a phenomenon known as the energy efficiency gap. We focus on contexts where both the quality offered by the energy efficiency provider and the behavior of the energy user are imperfectly observable. We first formalize under-provision of quality and compare two policy instruments: energy-savings insurance and minimum quality standards. Both instruments are second-best, for different reasons. Insurance induce over-use of energy, thereby requiring incomplete coverage in equilibrium. Standards incur enforcement costs. We then provide empirical evidence of moral hazard in the U.S. home retrofit market. We find that for those measures, the quality of which is deemed hard to observe, realized energy savings are subject to day-of-the-week effects. Specifically, energy savings are significantly lower when those measures were installed on a Friday-a day particularly prone to negative shocks on workers' productivity-than on any other weekday. The Friday effect explains 65% of the discrepancy between predicted and realized energy savings, an increasingly documented manifestation of the energy efficiency gap. We finally parameterize a model of the U.S. market for attic insulation and find that the deadweight loss from moral hazard is important over a range of specifications. Minimum quality standards appear more desirable than energy-savings insurance if energy-use externalities remain unpriced. JEL: D86,Q41Keywords: Energy efficiency gap, moral hazard, energy-savings insurance, minimum quality standard, credence good, day-of-the-week effect.

Through an evaluation of the 2009 Recovery Act's State Energy Efficient Appliance Rebate Program, this paper examines consumers' response to energy efficiency rebates. The analysis shows that 70 percent of consumers claiming a rebate were inframarginal and an additional 15 percent–20 percent of consumers simply delayed their purchases by a few weeks. Consumers responded to rebates by upgrading to higher quality, but less energy-efficient models. Overall the impact of the program on long-term energy demand is likely to be small. Measures of government expenditure per unit of energy saved are an order of magnitude higher than estimates for other energy efficiency programs. (JEL D12, H31, H71, Q48)