Overcoming Salience Bias: How Real-Time Feedback Fosters Resource Conservation

Posted: 6 Sep 2016

See all articles by Lorenz Goette

Lorenz Goette

University of Lausanne; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Verena Tiefenbeck

ETH Zürich

Kathrin Degen

University of Lausanne

Elgar Fleisch

ETH Zürich

Vojkan Tasic

ETH Zürich

Rafael Lalive

University of Lausanne - Department of Economics; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Thorsten Staake

University of Bamberg

Date Written: August 2016

Abstract

Inattention and imperfect information bias behavior toward the salient and immediately visible. This distortion causes costs to individuals, the organizations they work in, and soci- ety at large. We show that an effective way to overcome this bias is making the implications of one's behavior salient in real time, while individuals can directly adapt. In a large-scale field experiment, we gave participants real-time feedback on the resource consumption of a daily, energy-intensive behavior (showering). We find that real-time feedback reduced re- source consumption for the target behavior by 22%. At the household level, this led to much larger conservation gains in absolute terms than conventional policy interventions that provide aggregate feedback on resource use. High-baseline users displayed a larger conservation effect, in line with the notion that real-time feedback helps eliminate "slack" in resource use. The approach is cost-effective, technically applicable to the vast majority of households, and generated savings of 1.2 kWh per day and household, which exceeds the average energy use for lighting.The intervention also shows how digitalization in our every- day lives makes information available that can help individuals overcome salience bias and act more in line with their preferences.

Keywords: decision making, energy conservation, environmental behavior, randomized controlled trials, water conservation

JEL Classification: C93, D03, H41

Suggested Citation

Goette, Lorenz F. and Tiefenbeck, Verena and Degen, Kathrin and Fleisch, Elgar and Tasic, Vojkan and Lalive, Rafael and Staake, Thorsten, Overcoming Salience Bias: How Real-Time Feedback Fosters Resource Conservation (August 2016). CEPR Discussion Paper No. DP11480, Available at SSRN: https://ssrn.com/abstract=2834817

Lorenz F. Goette (Contact Author)

University of Lausanne ( email )

Department of Economics
Batiment Internef
Lausanne, 1015
Switzerland
(021) 692'3496 (Phone)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org

Verena Tiefenbeck

ETH Zürich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

Kathrin Degen

University of Lausanne ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015
Switzerland

Elgar Fleisch

ETH Zürich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

Vojkan Tasic

ETH Zürich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

Rafael Lalive

University of Lausanne - Department of Economics ( email )

Batiment Internef
Lausanne, 1015
Switzerland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Thorsten Staake

University of Bamberg ( email )

Kirschaeckerstrasse 39
Bamberg, 96045
Germany

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