Work

The Lightbulb Paradox: Evidence from Two Randomized Experiments

Year: 2013

Type: report

Abstract: Imperfect information and inattention to energy costs are important potential justifications for energy efficiency standards and subsidies. We evaluate these policies in the lightbulb market using a theoretical model and two randomized experiments. We derive welfare effects as functions of reduced-form sufficient statistics capturing economic and psychological parameters, which we estimate using a novel within-subject information disclosure experiment. In the context of the model, the main results suggest that moderate subsidies for energy efficient lightbulbs may increase welfare, but informational and attentional biases alone do not justify a ban on incandescent lightbulbs.

Source: National Bureau of Economic Research

DOI: 10.3386/w19713

Authors: Hunt Allcott, Dmitry Taubinsky

Institutions: National Bureau of Economic Research, Harvard University, University of California, Los Angeles, University of Chicago, New York University, Stanford University

Language: English

Topic: Energy, Environment, and Transportation Policies

Subfield: Renewable Energy, Sustainability and the Environment

Field: Energy

Domain: Physical Sciences

Open Access status: green

Funders: National Science Foundation, Alfred P. Sloan Foundation

OpenAlex ID: W1592296348

Cites: 110

Cited by: 24

Related to: 10