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Spillovers from Behavioral Interventions: Experimental Evidence from Water and Energy Use

Water efficiency saves energy

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This independent report is from the E2e collaborative, a joint initiative of the University of California, Massachusetts Institute of Technology, and University of Chicago.

This paper provides experimental evidence that behavioral interventions spill over to untreated sectors by altering consumer choice. We use a randomized controlled trial and high-frequency data to test the effect of social norms messaging about residential water use on electricity consumption. Messaging induces a 1.3 to 2.2% reduction in summertime electricity use. Empirical tests and household survey data support the hypothesis that this nudge alters electricity choices. An engineering simulation suggests that complementarities between appliances that use water and electricity can explain only 26% of the electricity reduction. Incorporating the cross-sectoral spillover increases the cost-effectiveness of the intervention by 62%.