Utilities Learn the Politics Behind 'Nudging' Consumers

Utilities Learn the Politics Behind 'Nudging' Consumers

Image CC licensed by Flickr user LaMenta3

Utilities hoping to nudge customers to conserve energy by telling them how much -- or little -- they and their neighbors consume may want to consider customers' political leanings first: That tactic tends to backfire with conservatives, a recent study suggests.

Democrats are more likely to lower their energy consumption in response to energy reports sent by their utilities, while conservative households may actually increase energy use, according to research from Dora L. Costa and Matthew E. Kahn, two professors at the University of California, Los Angeles (UCLA).

"To design nudges effectively, a 'nudger' must anticipate how diverse subjects will respond," Costa and Kahn wrote. "We have shown that while energy conservation nudges work with liberals, they backfire with conservatives."

The pair based their findings on a randomized field experiment conducted by a large California utility district that sent customers home energy reports with information on use, comparisons to their neighbors' consumption, and energy saving tips.

Costa and Kahn compared the responses of randomly selected households to information on their political views, such as individual political party of registration, donations to environmental groups, participation in green power purchase programs, and area demographics. They argued that those registered with liberal political parties, live in largely liberal communities, buy green power, and donate to environmental groups can be considered environmentalists.

The researchers estimated that Democratic households in liberal neighborhoods that buy green power and support environmental groups responded to the energy reports by lowering their energy use by 3 percent. Democratic households that were also large energy consumers cut their consumption by 6 percent.

Republican households that don't participate in green power programs and don't donate to environmental groups actually increased their energy consumption by 1 percent.

"If the same message 'turns on' greens but 'turns off' more conservative individuals, then to reach out to all members of a diverse population requires a mixed-messages strategy," the authors wrote.

Costa and Kahn noted that in a 2008 study, there was a 34 percentage point gap  among Democrats and Republicans in perception of climate change.

A 2009 Gallup poll found a growing number of Americans think the seriousness of climate change is exaggerated; when broken down by political view, 22 percent of Democrats said the news about climate change is exaggerated, compared to 66 percent of Republicans.

While the findings may offer a cautionary note to utilities, as well as to other businesses and services that give consumers information on how much energy they use, other research has shown that providing such data is an effective motivator to consume less. Peer-to-peer reports in some studies, for example, were found to reduce consumption by 1.2 percent to 2.8 percent.

Image CC licensed by Flickr user LaMenta3.