Can pecuniary and environmental incentives via SMS messaging make households adjust their electricity demand to a fluctuating production?

Niels Framroze Møller*, Laura Mørch Andersen, Lars Gårn Hansen, Carsten Lynge Jensen

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

The increasing deployment of renewables introduces substantial variability into the production of electricity, requiring demand to be more movable across time. We analyze data from a large Danish field experiment (2015–2016) to investigate whether households can be prompted, via SMS messages, to move electricity consumption, and if so, whether these are motivated by pecuniary or environmental motives. The analysis has two steps: As a novel approach, we first use automatic model selection, which allows a different time-series regression for each of the 1488 households studied. From this, we obtain a cross-section of estimated SMS effects, which we then regress on the motive type. Since households can opt out there is a risk of self-selection. We therefore control for the size, income and average consumption of the household, and the age, educational- and labor market status of the SMS recipient. The results suggest that SMS messages can to some extent motivate households to move consumption. Although a stronger financial motive seems more effective, mixing financial and environmental motives seems the most effective. Finally, women and elderly people are more inclined to move consumption.

Original languageEnglish
JournalEnergy Economics
Volume80
Pages (from-to)1050-1058
Number of pages9
ISSN0140-9883
DOIs
Publication statusPublished - 2019

Keywords

  • Field experimental data
  • General-to-Specific automatic model selection
  • Household-level electricity demand
  • SMS messaging

Cite this

@article{dbe346d89ecd444da42859dd354dd586,
title = "Can pecuniary and environmental incentives via SMS messaging make households adjust their electricity demand to a fluctuating production?",
abstract = "The increasing deployment of renewables introduces substantial variability into the production of electricity, requiring demand to be more movable across time. We analyze data from a large Danish field experiment (2015–2016) to investigate whether households can be prompted, via SMS messages, to move electricity consumption, and if so, whether these are motivated by pecuniary or environmental motives. The analysis has two steps: As a novel approach, we first use automatic model selection, which allows a different time-series regression for each of the 1488 households studied. From this, we obtain a cross-section of estimated SMS effects, which we then regress on the motive type. Since households can opt out there is a risk of self-selection. We therefore control for the size, income and average consumption of the household, and the age, educational- and labor market status of the SMS recipient. The results suggest that SMS messages can to some extent motivate households to move consumption. Although a stronger financial motive seems more effective, mixing financial and environmental motives seems the most effective. Finally, women and elderly people are more inclined to move consumption.",
keywords = "Field experimental data, General-to-Specific automatic model selection, Household-level electricity demand, SMS messaging",
author = "M{\o}ller, {Niels Framroze} and Andersen, {Laura M{\o}rch} and Hansen, {Lars G{\aa}rn} and Jensen, {Carsten Lynge}",
year = "2019",
doi = "10.1016/j.eneco.2019.01.023",
language = "English",
volume = "80",
pages = "1050--1058",
journal = "Energy Economics",
issn = "0140-9883",
publisher = "Elsevier",

}

Can pecuniary and environmental incentives via SMS messaging make households adjust their electricity demand to a fluctuating production? / Møller, Niels Framroze; Andersen, Laura Mørch; Hansen, Lars Gårn; Jensen, Carsten Lynge.

In: Energy Economics, Vol. 80, 2019, p. 1050-1058.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - Can pecuniary and environmental incentives via SMS messaging make households adjust their electricity demand to a fluctuating production?

AU - Møller, Niels Framroze

AU - Andersen, Laura Mørch

AU - Hansen, Lars Gårn

AU - Jensen, Carsten Lynge

PY - 2019

Y1 - 2019

N2 - The increasing deployment of renewables introduces substantial variability into the production of electricity, requiring demand to be more movable across time. We analyze data from a large Danish field experiment (2015–2016) to investigate whether households can be prompted, via SMS messages, to move electricity consumption, and if so, whether these are motivated by pecuniary or environmental motives. The analysis has two steps: As a novel approach, we first use automatic model selection, which allows a different time-series regression for each of the 1488 households studied. From this, we obtain a cross-section of estimated SMS effects, which we then regress on the motive type. Since households can opt out there is a risk of self-selection. We therefore control for the size, income and average consumption of the household, and the age, educational- and labor market status of the SMS recipient. The results suggest that SMS messages can to some extent motivate households to move consumption. Although a stronger financial motive seems more effective, mixing financial and environmental motives seems the most effective. Finally, women and elderly people are more inclined to move consumption.

AB - The increasing deployment of renewables introduces substantial variability into the production of electricity, requiring demand to be more movable across time. We analyze data from a large Danish field experiment (2015–2016) to investigate whether households can be prompted, via SMS messages, to move electricity consumption, and if so, whether these are motivated by pecuniary or environmental motives. The analysis has two steps: As a novel approach, we first use automatic model selection, which allows a different time-series regression for each of the 1488 households studied. From this, we obtain a cross-section of estimated SMS effects, which we then regress on the motive type. Since households can opt out there is a risk of self-selection. We therefore control for the size, income and average consumption of the household, and the age, educational- and labor market status of the SMS recipient. The results suggest that SMS messages can to some extent motivate households to move consumption. Although a stronger financial motive seems more effective, mixing financial and environmental motives seems the most effective. Finally, women and elderly people are more inclined to move consumption.

KW - Field experimental data

KW - General-to-Specific automatic model selection

KW - Household-level electricity demand

KW - SMS messaging

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DO - 10.1016/j.eneco.2019.01.023

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JF - Energy Economics

SN - 0140-9883

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