The Best Incentives for Cutting Electricity Bills
Want to cut your electricity bills? Find out from Savvy Sugar which incentives might help.
High electricity bills can spur you to want to cut your electricity costs, but there might be other incentives that might work better. Carnegie Mellon economics and psychology professor George Loewenstein tells Money magazine:
“I’ve come to the view that behavioral economics solutions are often being used as a substitute for more fundamental efforts. British Prime Minister David Cameron is a big fan of behavioral economics and gave a talk in which he said, ‘The best way to get someone to cut their electricity bill is to show them their own spending, to show them what their neighbors are spending and then show them what an energy-conscious neighbor is spending.’
This idea plays on Bob Cialdini’s research documenting the impact of social norms on behavior. It’s a great idea, and leads to reductions in energy use of a few percent, but showing someone their neighbor’s bill is not the best way to get them to cut their own bill. The best way is to charge an amount that reflects the true cost of the electricity, including social costs from importing oil, pollution, climate change, and so on.”
If you’re looking for ways to drive you to save more on your energy and remember mundane tasks like turning off lights when they’re not in use, do some research to find out how your electricity usage is impacting the environment. What motivates you to cut your electricity bill?
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