Public Praise vs. Private Pay: Effects of Rewards on Energy Conservation in the Workplace

Posted: 11 Nov 2011 Last revised: 2 Nov 2014

See all articles by Michel Handgraaf

Michel Handgraaf

Wageningen UR - Economics of Consumers and Households; Columbia University - Center for Research on Environmental Decisions

Margriet Van Lidth de Jeude

Ecofys

Kirstin C. Appelt

University of British Columbia (UBC) - Sauder School of Business; Columbia University

Date Written: August 30, 2012

Abstract

Any solution to rising levels of CO2 depends on human behavior. One common approach to changing human behavior is rewarding desired behavior. Because financial incentives often have side effects that diminish efficacy, we predict that more psychologically oriented social rewards are more effective, because they invoke adherence to descriptive and injunctive social norms. We investigated this by measuring electricity use for 13 weeks at a Dutch firm. Each week, employees were rewarded for conserving energy. They either received monetary rewards (€0-€5) or social rewards (grade points with a descriptive comment). Rewards were either private or public. In both the short and long term, public rewards outperformed private rewards, and social rewards outperformed monetary rewards. This suggests that private monetary rewards, although popular, may be ineffective. Instead, public social rewards may be a more promising approach to stimulating energy conservation. Such social rewards do not crowd out intrinsic motivation, have less need for large-scale institutions or exogenous funding, and work regardless of who is paying the energy bill. Thus, we argue that the social norms approach should be considered more frequently as a valuable tool in the intervention tool-kit, especially when focusing on low-cost environmental behavior.

Suggested Citation

Handgraaf, Michel and Van Lidth de Jeude, Margriet and Appelt, Kirstin C., Public Praise vs. Private Pay: Effects of Rewards on Energy Conservation in the Workplace (August 30, 2012). Ecological Economics, Vol. 86, pp. 86-92, 2013 . Available at SSRN: https://ssrn.com/abstract=1955898 or http://dx.doi.org/10.2139/ssrn.1955898

Michel Handgraaf (Contact Author)

Wageningen UR - Economics of Consumers and Households ( email )

Wageningen
Netherlands

HOME PAGE: http://www.ech.wur.nl/UK/Staff/Michel+Handgraaf/

Columbia University - Center for Research on Environmental Decisions ( email )

3022 Broadway
New York, NY 10027
United States

Margriet Van Lidth de Jeude

Ecofys ( email )

Stadsplateau 2
3526 KL
Utrecht, 3521 AZ
Netherlands

Kirstin C. Appelt

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

HOME PAGE: http://www.kirstinappelt.com

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