IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Prepress Content: The following article is a preprint of a scientific paper that has completed the peer-review process and been accepted for publication within The Energy Journal.

While the International Association for Energy Economics (IAEE) makes every effort to ensure the veracity of the material and the accuracy of the data therein, IAEE is not responsible for the citing of this content until the article is actually printed in a final version of The Energy Journal. For example, preprinted articles are often moved from issue to issue affecting page numbers, and actual volume and issue numbers. Care should be given when citing Energy Journal preprint articles.

Green is Good—The Impact of Information Nudges on the Selection of Voluntary Green-Power Plans

A recent trend has been a move toward greater reliance on renewable or “green” energy sources, especially in the residential sector. Using a choice experiment, this paper examines how providing information regarding the efficiency, cost, and environmental impacts of different power-generating sources impact consumers’ stated preferences for selecting voluntary green-power plans. Based on 21,000 plan choices from two different samples totaling over 1,800 respondents, our results indicate that information nudges significantly impact respondents’ choice of plan. Promoting the advantages of the green plan or the disadvantages of the “gray” plan increase green plan selection. The magnitudes of these estimated effects are economically significant being roughly equivalent to a change in the monthly green price premium of $4/month. We also find that promoting the advantages of the green plan is more effective when the green plan premium is relatively small, while highlighting the drawbacks of the gray plan is more effective when the green plan premium is relatively large. Our results suggest that information nudges have the potential to be a plausible, economical, and effective mechanism to increase adoption of voluntary green-power plans.

Download Executive Summary Purchase ( $25 )

Download Appendix 

Keywords: Renewable energy, Green power, Information, Nudge, Choice experiment

DOI: 10.5547/01956574.43.1.ecar

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 43, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


© 2021 International Association for Energy Economics | Privacy Policy | Return Policy