Using rewards and penalties to promote sustainability: Who chooses incentive‐based electricity products and why?

Abstract

Incentives, both rewards and punishments, are effective instruments that have been embedded in electricity product designs to reduce electricity consumption. Reducing electricity consumption can considerably contribute to climate change mitigation. To better understand consumer preferences for incentive‐based electricity products, a choice experiment using choice‐based conjoint analysis was conducted among a representative sample of Swiss electricity consumers. Based on stated preferences for different product attributes, four consumer segments were identified. While two segments (49.6%) stated preference for incentive‐based products, two other segments were less accepting of incentive components (particularly of penalties). We further explain the segments' preferences using psychographic characteristics, combining measures from psychology and behavioral economics. Precisely, environmental values and emotions, energy saving intentions and motives, perceived product attractiveness, as well as loss and risk aversion, and comparative optimism bias best described the segments. We align our findings with previous segmentation studies and argue for a stronger integration of behavioral economics in the environmental discourse. We further discuss the usefulness of consumer segmentation to develop tailored strategies that effectively target consumers' preferences and needs.

Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand

“…We contacted all 40,710 residential electricity customers in the Keihanna area by mail. 4 Of these, 1,659 customers confirmed their participation. We excluded students, customers who had electricity self-generation devices, and those without access to the internet.…”

Leveraging emotion for sustainable action

“…3,10 Up to now, behavioral research has mainly focused on cognitive factors such as risk perceptions, beliefs, values, attitudes, perceptions of social norms, perceptions of action efficacy, bounded rationality, and cognitive biases. 3,[10][11][12] Similarly, most intervention and communication strategies target cognitive processes, which are leveraged in an attempt to change behavior, for instance by communicating about specific environmental problems and ways to reduce them, 13,14 by emphasizing the individual benefits of sustainable actions, 15 by reframing the issue of climate change to increase citizen engagement, 16,17 by implementing pricing policies to make sustainable behavior more attractive, 18 or by introducing default options to promote sustainable choices. 19 While these cognition-based approaches are important and sometimes do result in the intended behavior change, they are limited in their scope.…”

Positive behavioral change during the COVID‐19 crisis: The role of optimism and collective resilience

“…In doing so, this study contributes to the overall understanding of how individual traits influence habit change (e.g., Howlett et al, 2008 ). Interestingly, recent work highlighted the role of optimism—and more specifically comparative optimism bias (Mahmoodi et al, 2021 )—in influencing one's perceived efficacy, leading to increased sustainable behaviors. The current study brings additional evidence of the importance of this trait in consumers' decisions and its impact on positive health and lifestyle‐related behavioral changes.…”

“…Personal optimism is defined as a tendency to expect positive versus negative life outcomes (Robinson‐Whelen et al, 1997 ). Optimism plays an important role in a person's positive transformations, namely for patients who suffered from serious illnesses (Allison et al, 2000 ; Mulkana & Hailey, 2001 ; Shepperd et al, 1996 ), and appears linked to the ability to develop healthier life habits (Ylöstalo et al, 2003 ) and sustainable choices (Mahmoodi et al, 2021 ). Given that optimists have more favorable expectations toward future events, they are more likely to engage in positive behavior changes—both physically and mentally—after a trying event (Scheier & Carver, 1985 ).…”