Hunt Allcott, Stanford University
Hunt Allcott, Stanford University
BGIE Seminar - Program Evaluation, Self-Selection, and Welfare: Experimental Evidence from Energy Efficiency
BGIE Seminar - Program Evaluation, Self-Selection, and Welfare: Experimental Evidence from Energy Efficiency
22 Sep 20161:30 PM – 3:00 PM
Open to public
Location:
Cotting Conference Room
We formalize a framework to evaluate welfare impacts of home energy efficiency programs under imperfect information, behavioral biases, and externalities, then estimate key parameters using a 100,000-household field experiment. Results counter practitioners’ conventional wisdom: we find no evidence of informational or behavioral failures thought to reduce participation, there are large non-monetary benefits and costs that traditional evaluations miss, realized energy savings are only 58% of predictions, and the two programs we study have negative 4.1% financial IRR. The two programs reduce welfare in our model, primarily because subsidies are not well-calibrated to currently-estimated externality damages.