How political identity changes response to energy conservation feedback by 200%

Intervention Environment, 

Abstract

Climate change is one of the greatest challenges of our time; reducing energy consumption is a key way to mitigate it. While many regions, like Scandinavia, have been quick to levy significant taxes on energy consumption, there has been a political gridlock surrounding such policies between “liberals” and “conservatives” in the United States. Many researchers have suggested nudges can help overcome this gridlock. In California, the energy provider OPOWER started sending a Home Energy Report (HER) to those in the upper percentile of energy consumption in their neighborhood, comparing their energy usage to their neighbors.

But how effective are such nudges at mitigating energy consumption? Dora L. Costa and Matthew E. Kahn argue that a nudge’s effectiveness depends on the individuals’ political ideology. Their data suggests that California’s HER policy was two to four more times more effective on liberals than it was on conservatives. The researchers argue that, consequently, policy makers should individualize nudges, based on their population’s political ideology, to maximize the nudge’s effectiveness at mitigating energy consumption.

Rating = 3/5 (Correlational research; unclear if participant privacy was respected)

The response to energy consumption feedback between political groups
Condition Results
Identified as Liberal
  • 2.4% overall decrease in energy consumption 
  • 4-5% decrease in consumption if they did not previously purchase renewable energy or donate to environmental causes
  • 45% less likely to read the report for less than 2 minutes
Identified as Conservative
  • 1.7% overall decrease in energy consumption 
  • 1-2% decrease in consumption if they did not previously purchase renewable energy or donate to environmental causes
  • 50% more likely to stop reading the report after 2 minutes

Key Concepts

Nudges: Interventions where behavioral architects change aspects of the choice architecture—as opposed to aspects of the choices themselves—to lead people to choose in a certain way.

Identity Economics: the branch of economics that focuses on how people’s identity—in this case, political identity—influences people’s choices.  

Social Norms: Social norms are rules that rule how individuals ought to act in a society. Oftentimes, social norms and group identity are closely tied: belonging to a certain group comes with having to follow certain group-specific rules.

The Problem

Climate change is one of the most pressing issues today, and most experts agree that curbing energy consumption is key to mitigating its effects. Consequently, policy makers across the world need to act fast: we need policies that lower energy consumption. One successful method has been to increase taxes on energy consumption; for instance, Danish taxes on energy consumption constitute more than 50% of consumers’ electricity bill.

In the United States, however, political gridlock has prevented policy makers from implementing high energy tax. (In various polls, Democrats and Republicans differ between 20 and 30 points on whether they’re in favor of higher electricity taxes.) This begs the question: if the political differences between liberals and conservatives halted traditional legislation, would they also affect the impact of a nudge? 

Many have turned to nudges as a low-cost alternative to traditional policy proposals like increased taxation. In a 2008 case, a large utility district started sending over-consuming citizens a HER report, which details how their electricity usage is above their neighbors’, and gives them tips on how to curb their electricity usage. 

Design

Who was included in the sample?

The researchers looked at 35,000 contiguous, single-family households who received an HER report, and at a control group of about 49,000 contiguous, single-family households who did not receive it. To be eligible, the household could not be in an apartment complex, and had to be between 250 and 99,998 square feet. They then looked at these households’ consumption data starting from January 2007 to October 2009, and matched it to the data provided by the HER report and the control data. (When either was unavailable, the household was discarded from analysis.)

How was political ideology assessed?

To test for political ideology, the researchers purchased household voter registration data from Aristotle, a political data and consulting firm. This allowed them to see a household’s political affiliation and donation patterns; in particular, the researchers were able to see whether i) a household’s votes were more liberal or conservative leaning, ii) whether the household donated to an environmental group, and iii) whether the household enrolled in the electricity company’s previous, voluntary renewable power program. They also looked at a survey, provided by the utility provider, of around 1,375 households’ attitudes towards the HER program. 

Using these measures, the researchers claimed to estimate whether a household was liberal or conservative, what their attitudes towards the HER program were, and how much energy they consumed before and after the program was implemented.

Results and Application

All else being equal, the nudge was effective in both liberals and conservatives, to differing degrees. Liberals decreased their consumption by 2.4%; conservatives decreased their consumption by 1.7%. Controlling for income, home value, and renter status had no statistically significant effect. Living in a liberal neighborhood did have a statistically significant effect: both liberals and conservatives in such neighborhoods were more likely to reduce consumption after reading their HER.

Examining additional variables

When all else was not equal, the difference between liberals and conservatives heightened. For instance, among households who did not purchase renewable energy, and which did not donate to environmental causes, liberals’ energy consumption reduced by twice more than their conservative colleagues’ (4% to 5% vs. 1% to 2%, respectively.) Looking at various additional vectors, the researchers estimated that the nudge was two to four more times more effective on liberals than on conservatives. Additionally, conservatives were more likely to report negative attitudes towards the HER, and were much more likely to stop reading after two minutes than liberals. 

Key takeaway

Overall, while the HER successfully nudged liberals and conservatives towards consuming less energy, it was more effective among liberals. Moreover, conservatives were much more likely to respond negatively to it. Thus, the researchers recommend that policymakers consider individualizing nudges based on household and neighborhood political make-up.

Industry

Application

Climate & Energy Similar differences among political groups have been found in other areas of climate policy. For instance, conservatives are more likely to positively respond to “carbon offsets” rather than “carbon taxes.”
Health & Wellbeing Given the recent polarization surrounding topics like COVID-19 vaccines, understanding how different political groups respond to interventions might help increase vaccination rates.
Public Policy Nudges are increasingly used as an alternative to traditional policy interventions. However, this intervention suggests that nudges might need to be individuated among political lines to maximize effectiveness.

Ethics

  • While OPOWER’s initial intervention was successful at curbing energy consumption among liberals, it was less successful—and sometimes backfired—amongst conservatives.
  • The data set’s size suggests that the participant set was diverse, but equity was not explicitly discussed.
  • Their purchase of the data set makes it unclear whether privacy and consent were respected.

Yes

Room for improvement

Insufficient information/Not applicable

Welfare
Does the intervention demonstrably improve the lives of those affected by it? The intervention looked at differences in effectiveness in another intervention—it did not itself change behavior. 
Does the intervention respect the privacy (including the privacy of identity) of those it affects? While all data was reported anonymously, some data was purchased from a third party. Thus, it is unclear whether it was gathered in a way that respected people’s privacy.
Does the intervention have a plan to monitor the safety, effectiveness, and validity of the intervention? Various metrics were employed to estimate household energy expenditure and political ideology. However, no metrics were used to evaluate safety or validity.
Autonomy
Does the intervention abide by a reasonable degree of consent? While some data was explicitly gathered consensually, it is unclear whether the purchased data set procured participants’ consent.
Does the intervention respect the ability of those it affects to make their own decisions? Consumers were still able to choose how much energy to spend.
Does the intervention increase the number of choices available to those it affects? The number of choices stayed the same.
Equity
Does the intervention acknowledge the perspectives, interests, and preferences of everyone it affects, including traditionally marginalized groups? While the intervention discusses the nudge’s effects amongst political lines, it does not mention how this intersects among racial or ethnic lines as well.
Are the participants diverse? Given the size of the data set, it is plausible to assume that the participants were diverse.
Does the intervention help ensure a just, equitable distribution of welfare? While climate change is  an equity issue, the fact that the nudge backfired on conservatives suggests that a more personalized intervention is necessary.

Related TDL Content

Holding the Line: Social Norms and Party-Line Voting:

We saw how a big motivation for California’s HER policy was that there was a large political gridlock between liberals and conservatives in the United States. We also saw how political identity affects the policy’s effectiveness at mitigating energy consumption. As it turns out, however, political identity’s effect on decision-making is partly responsible for the gridlock in the first place. In this article, Shi Shi Li provides a behavioral perspective on how political identity, and the social norms associated with that identity, lead members of congress to vote along party lines.

How Social Norms Complicate Behavioral Research:

In this study, we saw one way in which group identity complicates behavioral interventions. However, group identity also affects behavioral research, too. In this piece, John Lawrence documents some of the ways in which group identity—and the social norms that come with it— affect research in the behavioral sciences. 

Sources

Costa, D., & Kahn, M. (2010). Energy Conservation “Nudges” and Environmentalist Ideology: Evidence from a Randomized Residential Electricity Field Experiment (No. w15939; p. w15939). National Bureau of Economic Research. https://doi.org/10.3386/w15939