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The Effect of Feedback by Text Message (SMS) and Email on Household Electricity Consumption: Experimental Evidence

Abstract:
This paper analyzes the effect of supplying feedback by text messages (SMS) and email about electricity consumption on the level of total household electricity consumption. An experiment was conducted in which 1,452 households were randomly allocated to three experimental groups and two control groups. Feedback was supplied throughout 2007 to members of the experiment groups who accepted the invitation, and data on consumption of electricity for 2006 and 2007 collected for all participants and control group members. 30% of the households invited to receive feedback accepted the invitation. Results suggest that email and SMS messaging that communicated timely information about a household�s �exceptional� consumption periods (e.g. highest week of electricity use in past quarter) produced average reductions in total annual electricity use of about 3%. The feedback technology is cheap to implement and therefore likely to be cost-effective.

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Energy Specializations: Energy Modeling – Energy Data, Modeling, and Policy Analysis; Electricity – Markets and Prices ; Electricity – Policy and Regulation

JEL Codes:
E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
D42 - Market Structure, Pricing, and Design: Monopoly
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Household electricity use, Online feedback, SMS-text messages, Experimental evidence, Denmark

DOI: 10.5547/ISSN0195-6574-EJ-Vol31-No3-6


Published in Volume 31, Number 3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.