Behavioral Sciences Workshop: Hunt Allcott (NYU), “The Welfare Effects of Nudges: A Case Study of Energy Use Social Comparisons””
Abstract: Interventions to encourage pro-social behavior are typically evaluated on the basis of their effects on behavior, not their effects on welfare. We implement a natural field experiment to measure the welfare effects of one especially policy-relevant intervention, home energy conservation reports. We measure consumer surplus by sending consumers introductory reports and using an incentive-compatible multiple price list survey to determine willingness-to-pay to continue the program. We use these estimates, along with estimates of program costs and externality reductions, to carry out a comprehensive welfare evaluation. The results underscore that the welfare effects of non-price interventions can be measured, and they may imply very different policy implications than the traditional cost effectiveness metric.
Hunt Allcott is an Assistant Professor of Economics at New York University and a Faculty Research Fellow at the National Bureau of Economic Research. He is a Scientific Director of ideas42, a think tank that applies insights from psychology and economics to business and policy design problems, an Affiliate of Poverty Action Lab, a network of researchers who use randomized evaluations to answer critical policy questions in the fight against poverty, and a Faculty Affiliate of E2e, a group of economists, engineers, and behavioral scientists focused on evaluating and improving energy efficiency policy. He is also a Contributing Author of the Intergovernmental Panel on Climate Change Fifth Assessment Report.
This workshop is held jointly by the Yale departments of Political Science, Economics, Psychology, and School of Management, and sponsored by the Center for the Study of American Politics.