Don't nudge on me

How would you react if you were informed of your neighbors' electricity usage and said you had "room to improve"? In the U.S. it depends on whether you are a Democrat or a Republican write UCLA economists Dora Costa and Matthew Kahn:

“Nudges” are being widely promoted to encourage energy conservation. We show that while the electricity conservation “nudge” of providing feedback to households on own and peers’ home electricity usage works with liberals, it can backfire with conservatives. Our regression estimates predict that a Democratic household that pays for electricity from renewable sources, that donates to environmental groups, and that lives in a liberal neighborhood reduces its consumption by 3 percent in response to this nudge. A Republican household that does not pay for electricity from renewable sources and that does not donate to environmental groups increases its consumption by 1 percent.

More from Ray Fisman at Slate:

That some groups respond in unexpected ways to well-meaning nudges is a lesson that the architects of "behaviorally informed" policy and regulation should keep in mind in drafting their messages. Costa and Kahn's findings suggest that you shouldn't try to prod Republicans into conserving energy through this type of social pressure. But perhaps there is a nudge that would resonate with Opower's conservative customers. Future messages could be tailored to the market—what works in San Francisco might backfire in San Diego—or even to individual households based on their political leanings, ties to environmental organizations, or enrollment in renewable-energy programs.

But this starts to sound an awful lot like fine-tuned social engineering, which gets us away from the original vision of simple nudges making a better world. And it starts to sound exactly like the type of heavy-handed governing that Republicans may be quietly rebelling against by turning up their thermostats.

Emphasis added.

Virginia Postrel recently made a similar observation:

The daughter of Indian immigrants, Iyengar is drawn to such cross-cultural comparisons. Consider an experiment she conducted with elementary-school children in San Francisco’s Japantown. Half were what Iyengar calls Anglo Ameri­can, and half were the children of Japanese or Chinese immigrants who spoke their parents’ native language at home.

“Ms. Smith” showed each child six piles of word puzzles and six marking pens. Each pile contained one category of anagram — words about animals, food, San Francisco, etc. — and each marker was a different color. A third of the children were told to pick whichever category and marker they wanted to play with. Another third were told they should work on a specific category with a specific marker. With the final third, Ms. Smith riffled through some papers and pretended to relay instructions from the child’s mother. In the latter two cases, the category and marker were in fact the ones picked by the most recent child to select freely.

The two ethnic groups reacted differently. The Anglo kids solved the most anagrams and played the longest when they could pick their own puzzles and markers, while the Asian children did best when they thought they were following their mothers’ wishes.

To the Anglo children, their mothers’ instructions felt like bossy constraints. The Asians, by contrast, defined their own identities largely by their relationship with their mothers. Their preferences and their mothers’ wishes, Iyengar writes, “were practically one and the same.” Doing what they thought their mothers wanted was, in effect, their first choice.

Anglos and Asians did share one important reaction: “When the choices were made by Ms. Smith, a stranger, both groups of children felt the imposition and reacted negatively.” Just because people happily comply with the choices of an intimate — or, for that matter, an authority they’ve selected themselves — does not mean they want bureaucratic strangers making their decisions. Advocates who want to use psychology experiments to justify choice-limiting public policy should keep that lesson in mind.

Emphasis added.

Ironically, and not so coincidentally (it is Earth Week), Richard H. Thaler and Cass R. Sunstein, the authors of Nudge: Improving Decisions About Health, Wealth, and Happiness posted this on their blog the other day:

A free online service to track energy consumption launches on Earth day. It’s called Welectricity. You don’t need a separate smart meter; just your energy bills. If your friends sign up too, you can compare your usage with theirs.

If no one tells Republicans this might work to reduce energy. Oops. I just did.

Sunstein is Obama's regulatory czar.

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