Influencing Peak Demand: A Hug, Nudge, Smack or Shove?

This research project, funded by Energy Consumers Australia, focused on delivering ways to help energy consumers to make more effective energy choices and reduce their power bills and CO2 emissions along the way. The findings from this research project have the potential to deliver significant benefits to the community, industry and energy consumers.

The project tested four approaches to encourage consumers to manage their electricity use: a nudge (rewards + passive effort), hug (rewards + active effort), smack (punishment + active effort) and shove (punishment + passive effort) through a series of experiments.

The aim of the research was to evaluate which of these four approaches was most effective, both in terms of appeal to consumers and in changing their patterns of electricity usage.

This project combined tools from behavioural economics and social marketing that can change the way government and industry encourage people to make better decisions for themselves. Where standard approaches rely on fictitious characters displaying reasonable or rational behaviour, this project relied on behavioural data to inform how to best achieve the most effective outcomes for consumers to minimise their power bills, as well as reduce future network cost pressures and emissions at the same time. This research shows how these two fields can complement business research to achieve better policy outcomes and help drive improvements in living conditions of Australians – Transdisciplinary Behavioural Business research for real world Australians.

Key Findings:

• The results indicate that consumers in an energy efficiency context respond best to the moderate Shove
• A minor Shove is initially successful, but both the Shove and the Smack lead to less pro-social behaviour when applied over time.
• Notable significant differences were found for the following individual differences:
  • Participatory citizenship: Participants with higher levels of participatory citizenship contribute larger amounts to the public good.
  • Age: As participant age increases, so does the contribution amount.
  • Education: As education levels increase, contribution will also increase.

Guiding Theory:

• Behavioural Forms Exchange Matrix
• Behavioural Economics