Publications
“Do Extrinsic Incentives Undermine Social Norms? Evidence from a Field Experiment in Energy Conservation”
(with Michael K. Price, Steve Puller and Gonzalo Sánchez), Journal of Environmental
and Resource Economics, 67(3):413-428, July 2017.
Abstract:
Policymakers use both extrinsic and intrinsic incentives to induce consumers to change behavior. This paper investigates whether the use of extrinsic financial incentives is complementary to intrinsic incentives, or whether financial incentives undermine the effect of intrinsic incentives. We conduct a randomized controlled trial that uses information interventions to residential electricity customers to test this question. We find that adding economic incentives to normative messages not only does not strengthen the effect of the latter but may reduce it. These results are consistent with recent theoretical work that suggests a tension between intrinsic motivation and extrinsic incentives.
Work in Progress
(with Michael K. Price, Steve Puller and Gonzalo Sánchez)
Abstract:
Using prices as policy instruments have traditionally been prescribed as first-best policies to induce energy conservation. However, recent research on OPower has demonstrated that social comparisons can encourage energy conservation. In a common setting, we evaluate the relative strength of two types of information interventions. We use a unique feature of the electricity tariff in Quito, Ecuador to make salient a sizable price notch that had not historically induced consumption reduction. We conduct a large-scale field experiment where randomly selected households receive one of three treatments that: (1) make the price notch salient, (2) make a social comparison, or (3) do both. We find that households with historical consumption above the notch respond to the social comparison information by reducing consumption. However, the effect of the price salience treatment is smaller and only present for households who historically consumed just above the price notch.
“Price vs. Non-Price Policy Instruments to Encourage Energy Conservation: Evidence from a Randomized Control Trial in Ecuador”
(with Manuel Hernández and Gonzalo Sánchez)
Abstract:
Over the past two decades, conditional cash transfer (CCT) programs have been implemented extensively across the world, reaching over sixty countries, and have become one of the most popular social programs in developing regions. In Latin America, roughly one of every four individuals in 17 countries have received cash transfers. While there is an abundance of literature on the short-term effects of CCT programs on educational and non-educational outcomes, much less is known about their longer term effects in part due to the difficulty of following individuals for prolonged periods of time. This paper examines the impact of a large-scale CCT program, PROSOLI, on high school attainment in the Dominican Republic from 2005 to 2017. We implement a quasi-experimental approach combining extensive administrative, household and educational records from program and nonprogram participants across the country. We find that exposure to school transfers is, on average, associated with a 6-8 percentage points higher probability of completing high school relative to nonparticipation. The effect of the program seems larger on urban areas and increases with the amount of program exposure, while we do not observe major differences between male and female participants. The results are robust to alternative estimation methods and the use of different samples. Considering that one in two students in the public school system in the country who finish elementary school do not complete high school and the returns to high school attainment are 26% (9%) higher than only completing primary school (not completing high school), the subsequent program effects on earnings are non-negligible. The study contributes to the still relatively scarce literature analyzing longer term schooling effects of CCT programs and to the discussion in the Dominican Republic about the lasting effects of this large-scale social program, which have benefited more than a quarter of the population.