Nudging the Poor and the Rich - A Field Study on the Distributional Effects of Green Electricity Defaults

46 Pages Posted: 24 Mar 2018 Last revised: 7 Mar 2019

See all articles by Claus Ghesla

Claus Ghesla

ETH Zurich - Department of Humanities, Social and Political Sciences

Manuel Grieder

ETH Zürich - Department of Humanities, Social and Political Sciences (GESS); Zurich University of Applied Sciences (ZHAW)

Renate Schubert

ETH Zürich - Center for Economic Research

Date Written: March 6, 2019

Abstract

Choice defaults are an increasingly popular public policy tool. Yet there is little knowledge of the distributional consequences of such nudges for different groups in society. We report results from a field study in the residential electricity market in which we contrast consumers' contract choices under an existing default regime with active choices without any default. We find that the default is successful at curbing greenhouse gas emissions, but it leads poorer households to pay more for their electricity consumption than they would want to, while leaving a significant willingness to pay for green electricity by richer households untapped.

Keywords: choice defaults, welfare, green electricity, public policy, nudging

JEL Classification: D12, D31, D61, D63, H23, M38, Q48

Suggested Citation

Ghesla, Claus and Grieder, Manuel and Schubert, Renate, Nudging the Poor and the Rich - A Field Study on the Distributional Effects of Green Electricity Defaults (March 6, 2019). Available at SSRN: https://ssrn.com/abstract=3147028 or http://dx.doi.org/10.2139/ssrn.3147028

Claus Ghesla (Contact Author)

ETH Zurich - Department of Humanities, Social and Political Sciences ( email )

Haldeneggsteig 4
Zurich, Zurich 8006
Switzerland

Manuel Grieder

ETH Zürich - Department of Humanities, Social and Political Sciences (GESS) ( email )

Clausiusstrasse 87
CLD C11
Zurich, 8093
Switzerland

Zurich University of Applied Sciences (ZHAW)

School of Management and Law
Winterthur, CH 8401
Switzerland

Renate Schubert

ETH Zürich - Center for Economic Research ( email )

Weinbergstr. 35
Zurich 8092
Switzerland

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