Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage

By providing feedback to customers on home electricity and natural gas usage with a focus on peer comparisons, utilities can reduce energy consumption at a low cost. We analyze data from two large-scale, random-assignment field experiments conducted by utility companies providing electricity (the Sacramento Municipal Utility District [SMUD]) and electricity and natural gas (Puget Sound Energy [PSE]), in partnership with a private company, Opower, which provides monthly or quarterly mailed peer feedback reports to customers. We find reduction in energy consumption of 1.2% (PSE) to 2.1% percent (SMUD), with the decrease sustained over time (7 months [PSE] and 12 months [SMUD]). (JEL C44, D03, L94, Q41). The Author 2012. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.