Traditional economics relies on increasing prices to effectively influence behavioral change. There are, however, a variety of psychological tools which can be equally effective in influencing changes in consumer behavior. EfD researchers explore the use of nudging as a tool to help reduce energy use in non-residential areas of Cape Town, South Africa.
Commercial buildings account for a large amount of energy consumption around the world contributing to significant greenhouse gas emissions. In the past technological advances such as energy-efficient appliances and smart sensors have helped reduce high energy demands.
In developing countries, these solutions are often not practical. Behavioral interventions, however, have proven effective in reducing energy consumption in residential areas through nudges such as receiving conservation information or competing against households with ‘best practice’.
Studied behavior in commercial buildings
Historically behavioral tools have only been explored within residential areas where the change in behavior could be profitable for a household. Limited research has explored if these same nudges could be successful in a non-residential setting.
In a recent study, The Power of Nudging: Using Feedback, Competition, and Responsibility Assignment to Save Electricity in a Non‑Residential Setting, led by EfD researchers, Dr. Rebecca Klege and Prof. Martine Visser (director of EfD South African hub, EPRU), behavioral nudges to help reduce energy consumption were explored within a non-residential area of Cape Town.
“Currently all the action regarding nudges and psychological tools in economics has been within the residential sector. This study provides a unique look at African-specific non-residential energy conservation. This is particularly important in a developing country where there is more room to incorporate this research into policy,” says Dr. Rebecca Klege, lead author of the study.
Divided into three groups
The study centered around one office building that had smart electricity meters installed and was split into three groups investigating the effects of various behavioral nudges on energy consumption. The first group was sent repeated general energy conservation information emails and participated in weekly inter-floor competitions. The second group also received energy conservation information and participated in weekly inter-floor competitions but were also assigned a weekly floor "energy advocate" to encourage and coordinate behavioral change around energy consumption in the building. The third group acted as a control and received no intervention.
No financial benefits for participants
A key aspect of the study centered around the fact that there was no direct financial benefit for participants through energy conservation but rather a benefit for the greater good.
“This is a relatively unique aspect of this type of research and provides valuable information on how we can influence behavior even when people aren’t paying for a service or resource,” explains Dr. Rebecca Klege.
Implications for policy
Results from the study showed that through behavioral nudges energy consumption can be reduced by up to 13% depending on the level of intervention. This suggests that behavioral nudges can be an effective tool in conserving energy within both residential and non-residential areas.
“Policy makers shouldn’t shy away from nudges, nor should they discard the concept. This study has provided clear evidence that [nudges] can work even when people aren’t directly responsible for the costs of electricity as seen in these non-residential areas,” says Dr. Rebecca Klege.
By: Dr. Michelle Blanckenberg