nep-nud New Economics Papers
on Nudge and Boosting
Issue of 2023‒12‒04
one paper chosen by
Marco Novarese, Università degli Studi del Piemonte Orientale

  1. To Go Electric or To Burn Coal? A Randomized Field Experiment of Informational Nudges By Hanming Fang; King King Li; Peiyao Shen

  1. By: Hanming Fang; King King Li; Peiyao Shen
    Abstract: Coal heating in residential homes is an important source of indoor air pollution, leading to detrimental health effects. We conduct a randomized field experiment in northern China using three types of SMS campaigns targeting three potential biases that may hinder the adoption of electric heating: a Cost SMS campaign, designed to address the overestimation of electricity expenses; a Health SMS campaign, aimed at addressing the underestimation of health damage associated with coal heating; and a Social Comparison SMS campaign, intended to inform households about the popularity of electric heating. We find that the Cost SMS backfires: it instead leads to a substantial reduction in electric heating, which can be attributed to salience bias induced by the Cost SMS, which drew heightened attention to the cost of electricity. The Health SMS is ineffective for households that underestimate the health damage of coal heating and even backfires for those who expressed little concern about the health consequences. Social Comparison SMS is only effective for a small proportion of households who were concerned about their neighbors' heating choices. Overall, our findings suggest that SMS campaigns targeting these biases are largely ineffective, and caution should be exercised when applying plausible nudge interventions. The findings also suggest that households may be motivated to maintain their beliefs and resist paternalistic interventions.
    JEL: C93 D91 Q50 Q58
    Date: 2023–11

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