“GREEN CONSUMPTION: THE ROLE OF NUDGING”

September 5, 2017

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Published in 2017

There has been a growing interest in using behavioral insights and nudging to better understand individual behavior and to design interventions that lessen the impact of human activity on the environment. The traditional role of behavioral interventions such as nudges has been in areas where consumers can be expected to make poor choices for themselves, such as decisions related to savings and health (Thaler and Sunstein, 2009). The intention of the nudge has been to improve these poor choices for the individual. When it comes to behavioral interventions targeting behavior that generates negative externalities, the intention is different since the primary concern is a reduction in the negative externality.

Fredrik Carlsson, Professor of Economics at the University of Gothenburg in Sweden shared the results of his most recent research with the faculty members: "Green Consumption: The Role of Nudging".

According to Professor Carlsson, his research focuses on how to make people change their choices without changing economic incentives or forbidding or telling them what to do, just by changing their "choice environment".

Professor Carlsson's group researches the behavior of 1857 householders in Jericó, Antioquia. The group rolled out a social information campaign (the nudge) on water use during a year. In particular, the research team provided households with regular feedback on "their water consumption relative to that of their neighbors”.

It was found that, on average, the social-norm intervention reduced water use by 5-6%. Notably, significant spillovers were also reported: the most responsive household´s also reduced their electricity consumption by 9%.

Professor Carlsson explained that their research results are similar to those found in industrialized cities. Thus, individual behavior may be determined by similar factors whether in a Swedish city or in a rural town in Colombia.

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