The Efficient Life: Peer Pressure
Why I will use less energy if my utility tells me how much energy you use
In this project, "The Efficient Life," Slate is seeking your best ideas for helping people use less energy at home and save money. You can read Daniel Gross' explanation of The Efficient Life here, and his article about compact fluorescent light bulbs here. You can submit your proposal here and scan all the proposals submitted by readers so far. Over the next six weeks, readers and judges will choose a dozen finalists, the top five ideas, and a winner.
Am I an energy hog? Compared to my fellow citizens, the residents of my town, people who live in similar climates, people who have families or houses of the same size, do I use more or less energy?
Based on some of the reaction to my posting of my electricity and heating oil usage, I could well be a fossil-fuel porker. One European reader pronounced himself "flabbergasted" at the amount of energy I consume. And I've received a fair amount of grief for reporting that my house contains 122 light bulbs. (In my defense, many of these are ornamental and rarely used, like the eight bulbs in the two lights on either side of my front door. Yesterday afternoon, only three light bulbs were on in the house.)
I make a point of turning out the lights, turn down the heat substantially at night, and try to use my bicycle when weather permits. As I drive around town, I notice houses that dwarf mine and think that their residents' cooling and heating bills must also dwarf mine. In fact, most people who make some efforts to reduce energy use probably think they're using less energy than average. But as behavioral economists love to point out, people routinely overstate their own virtues. Surveys frequently show that something like 80 percent of people think they're above-average drivers.
If I had to guess, I'd say that I am using less energy than most of my friends and neighbors who live in houses that are the same size or larger. But guessing is all I can do. The bills and statements I receive from my energy providers don't contain a lot of useful information. I just received my electric bill, which showed that my average daily usage in February 2010 was 50 kilowatt hours per day, compared with 49 kilowatt hours per day in February 2009. But there's no detailed data. I don't have any idea of what 50 kilowatt hours means, or how my electricity consumption changes through the day, or through the week. How much is used on the weekend, when four people are in the house most of the time, and how much on weekdays, when the house is frequently empty? And how much am I using compared with the typical American, the typical customer of the utility, the typical resident of my town, the typical resident of my block? The same information vacuum applies to my heating oil bill. I know when I get an oil delivery, but that's about it.
Engineers like to say that what gets measured gets controlled. But the measurements I—and the overwhelming majority of consumers—receive from energy providers don't indicate much beyond aggregate use. As a result, they don't help those of us who want to exert control over our energy use.
One solution would be a smart meter, which could provide me with real-time data on how much energy I'm using. But I'm more interested in having my utilities provide me with more information about how much electricity my next-door neighbors are using. Maybe that sounds nosy. Why should I care what other people are doing? Shouldn't I just focus on my own behavior and energy use?
Well, reducing energy use—like reducing the use of all sorts of other resources—should be a simple matter of economics. Rational people seek to maximize profits, and hence should naturally seek to use less of valuable, expensive resources such as electricity or heating oil. But it turns out that people need other types of motivation in order to act. And one of those motivations can be peer pressure, or social norms.
Xcel Energy has been doing experiments about this in its service area. It sends report cards that "lets the customers know in a colorful bar chart how they rate when their combined electrical and natural gas use for the past month is compared with 100 neighbors in similar-size homes. It also lets them know how they did compared with their most efficient neighbors." Those that perform well against these benchmarks receive two smiley faces. It sounds like second grade, but this information can be a powerful motivator. Utilities that have tried such efforts report that these efforts alone result in reductions of 2 percent to 3 percent, which is significant.
Peer pressure has proved to be a spur to sustainable practices in other areas, such as hotels. In one experiment described in Scientific American, economists placed two signs in different guest rooms. One urged guests to reuse towels to help protect the environment, and the other noted that most of the other people who stay in the hotel opt to reuse their towels. As Scientific American noted: "the social-norm message worked about 25 percent better than the standard environmental one." What's more, "[t]elling guests that those who had stayed in this room had reused towels worked better than saying that other guests at the same hotel had done so—even though all the rooms were alike." (The article that presents the research appeared in the Journal of Consumer Research.)
Daniel Gross is the Moneybox columnist for Slate and the business columnist for Newsweek. You can e-mail him at email@example.com and follow him on Twitter. His latest book, Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, has just been published in paperback.