Default Effects And Follow-On Behaviour: Evidence From An Electricity Pricing Program
| Autor: | Meredith Fowlie, Catherine Wolfram, Patrick Baylis, C Anna Spurlock, Annika Todd-Blick, Peter Cappers |
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| Rok vydání: | 2021 |
| Předmět: | |
| Zdroj: | The Review of Economic Studies. 88:2886-2934 |
| ISSN: | 1467-937X 0034-6527 |
| Popis: | We study default effects in the context of a residential electricity-pricing program. In the large-scale randomized controlled trial we analyse, one treatment group was given the option to opt-in to time-varying pricing while another was defaulted into the program but allowed to opt-out. We provide dramatic evidence of a default effect on program participation, consistent with previous research. A novel feature of our study is that we also observe how the default manipulation impacts customers’ subsequent electricity consumption. Passive consumers who did not opt-out but would not have opted in—comprising more than 70$\%$ of the sample—nonetheless reduce consumption in response to higher prices. Observing of this follow-on behaviour enables us to assess competing explanations for the default effect. We draw conclusions about the likely welfare effects of defaulting customers onto time-varying pricing. |
| Databáze: | OpenAIRE |
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