Paternalism and Energy Efficiency: An Overview
44 Pages Posted: 11 Aug 2014 Last revised: 21 Feb 2021
Date Written: August 2014
This review paper provides an overview of the application of behavioral public economics to energy efficiency. I document policymakers' arguments for “paternalistic” energy efficiency policies, formalize with a simple model of misoptimizing consumers, review and critique empirical evidence, and suggest future research directions. While empirical results suggest that policies to address imperfect information and internalities may increase welfare in some cases, some existing policies may be mistargeted or miscalibrated.
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