This is Part 10 of the Nudge Database.
Part I|| Part II|| Part III|| Part IV|| Part V || Part VIPart VIIPart VIIIPart IX@Makeuya
Nudge: A natural field experiment in
Norway worked with a household appliances retailer to encourage more energy-efficient purchases. An
information treatment condition provided labels showing the cost of the
products’ lifetime energy consumption. A training treatment provided training
to sales staff. Neither treatment had any effect on the purchase of fridge
freezers but they resulted in more energy efficient tumbler driers sold by 4.9%
and 3.4% respectively.
Tags: energy efficiency
Source: Kallbekken et al. (2012), ‘Bridging
the Energy Efficiency Gap: A Field Experiment on Lifetime Energy ’,
Journal of Consumer Policy
Nudge: The authors conducted an RCT
where the default settings on office thermostats in an OECD office
building were manipulated during the winter heating season. Employees’ chosen
thermostat settings were observed over a 6 week period. They find that (i) a
1°C decrease in the default caused a reduction in the chosen setting by 0.38°C
on average and (ii) office occupants who are more apt to adjust their
thermostats prior to the intervention were less susceptible to the default.
Tags: energy / defaults
Source: Brown et al. (2013), 'Testing the effect of defaults
on the thermostat settings of OECD employees', Energy Economics
Nudge: The authors conduct a field
experiment with the IRS to examine why people fail to collect benefits they are
eligible for. They sent letters to 35,050 California taxpayers who filed their
taxes but didn’t claim their 2009 Earned Income Tax Credit (EITC) despite being
eligible for it. They varied the text of the mailings to create 3 different conditions:
(1) The Control group received a standard
letter, (2) there was a Simplification treatment and (3) a Display of benefit treatment .
results show that all the mailings substantially increase the likelihood of
subsequent year take-up, with the two treatments being more effective than the
control. The authors project that applying the tested interventions to all
filing non-claimants could reduce incomplete take-up among filers from 10% to
Tags: salience / disclosure / tax
Source: Bhargava & Manoli
are Benefits Left on the Table? Assessing the Role of Information, ’, American Economic Review
Nudge: The authors conducted a field experiment
using experimental economists as subjects. They sent letters to economists who submitted
papers to the Economic Science Association 2006 meeting in Nottingham. One
sentence was varied in the letter to vary between (1) discount and (2) penalty framings.
the conference fee will include a penalty for late registration after]”
They find that while the behaviour of junior
experimental economists is affected by the framing, the senior members of the
subject pool are unaffected.
Source: Gächter et al. (2009) 'Are experimental economists
prone to framing effects? A natural field experiment', Journal
of Economic Behavior & Organization
Nudge: The authors examine the $35
billion bank overdraft market. Specifically the authors are concerned with
whether overdraft fees are sufficiently salient
for most people. They issued 21 surveys about overdraft fees between 2004-2008
to over 7,000 participants.
find that when people take the surveys, they are less likely to incur a fee in
the following month. When they take several surveys, the likelihood of paying
overdraft fees is significantly reduced for up to 2 years. This reduction comes
not from increasing balances but from making fewer debit transactions and
cancelling automatic recurring withdrawals. This indicates that the act of
taking the survey is itself a kind of
treatment, one that is effective at changing overdraft-related behaviour.
Tags: salience / bank overdrafts /
survey treatment effects
Source: Stango & Zinman (2011), ‘Limited and Varying Consumer
Attention: Evidence from Shocks to the Salience ’, NBER Working Paper
authors examine whether completing a household survey changes the later behavior of the participants. This paper describes five field studies, two concerned
with microlending and three with health. Subjects in the treatment groups were
randomly assigned to receive a survey about household finances and the authors
later followed up to check their subsequent use of a related product.
the health studies the authors find that being surveyed increases the use of
water treatment products and increases take-up of medical insurance. In the
micro-lending studies however, and in contrast to the paper above, they found
no effect of surveys on borrowing behavior.
Tags: salience / surveys / health
Source: Zwane et al. (2011) ‘Being surveyed can change later
behavior and related parameter estimates’, PNAS
Nudge: The Nutrition Labeling and Education Act (NLEA) required most
food products to include a nutrition label. Prior to the NLEA labeling was
voluntary. This study uses nutrition label information and supermarket scanner
data pre and post-NLEA to examine the impact of moving from a voluntary to
mandatory labeling regime on consumer product choice.
Prior to the NLEA all low-fat salad dressings had
a nutrition label, while the majority of the higher fat dressings did not.
However, there remained large variation in fat content among dressings that did
not voluntarily label. Those with the highest fat levels experienced a
significant decline in sales after they were required to disclose. The results
indicate that even in markets with credible, low-cost mechanisms to disclose,
mandatory labeling can have an impact on consumer behavior and health.
Tags: mandated disclosure / health
Source: Mathios (2000), ‘The Impact of
Mandatory Disclosure Laws on Product Choices: An analysis of the Salad Dressing Market’,
Journal of Laws and Economics
Nudge: The authors use a survey and an
experiment with participants in Mexico’s privatized social security system to examine
(1) how financial literacy impacts workers’ choices and (2) how simplifying
information on management fees may increase measures of price elasticity
sensitivity among the financially illiterate.
find that when presenting fees in pesos instead of annual percentage rates,
financially illiterate workers focus much more on fees when choosing between
investment funds and select funds with lower average fees. Even though changes
in information have small impacts on the fees of the selected fund, the changes
in choice behavior imply a substantial increase in price sensitivity. Hence,
the way in which information is presented to workers can have a substantial
impact on optimal fees that firms can charge in the marketplace.
Tags: framing / investments /
Source: Hastings & Tejeda-Ashton
(2008), 'Financial literacy, information, and demand elasticity: survey and experimental evidence from Mexico', NBER Working Paper
Nudge: The authors conducted a field
experiment at a national chain of payday stores to examine the effectiveness of
mandated disclosure with the goal of
helping payday-loans borrowers overcome cognitive biases or limitations. Chief
among these is a common failure to appreciate the true annualized interest rate
of the loans, which run in several thousand percent. The disclosure information
they provide includes annualized rates of interest, credit-card comparisons and
peer usage statistics.
They find that information that showing the
adding-up effect of loan fees over several pay-cycles helps people think less
narrowly about finance costs and results in 11% less borrowing in the
subsequent 4 months.
Tags: disclosure / borrowing
Source: Bertrand & Morse (2011), ‘Information disclosure, cognitive
biases, and payday borrowing’, Journal
Nudge: The author describes a
psychological model that seeks to explain what kind of feedback about energy-efficient goods will lead to
reduced consumption. The author tentatively posits that the most successful
feedback combines these features; (1) it’s given frequently and over a long
time, (2) it provides an appliance-specific breakdown, (3) it’s presented in a
clear and appealing way and (4) it uses computerized, interactive tools.
Tags: energy efficiency
Source: Fischer (2008), ‘Feedback on household electricity
consumption: A tool for saving energy?’, Energy Efficiency