Distinguishing Economic and Moral Compensation in the Rebound Effect : A Theoretical and Experimental Approach

The rebound effect occurs when improvements in energy efficiency result in lower energy savings than expected due to changes in behavior. These behavioral changes can be caused by an economic compensation and a moral compensation. For moral compensation, we consider moral licensing effect, but also the case of moral cleansing effect. The objective of our paper is to distinguish the economic and moral compensation in the rebound effect. To do so, we propose a theoretical model and an online experiment with 1622 subjects. Our experimental results show that an improvement in energy efficiency leads to a rebound effect through economic compensation. Concerning moral compensation, we do not observe any moral licensing but rather consistent behavior among participants with strong environmental attitudes. Finally, we find evidence for moral cleansing, which reduces the magnitude of the rebound effect