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Little is known about the effect of message framing on conservation behavior over time. In a randomized controlled trial with residential households, we use advanced metering and information technologies to test how different messages about household energy use impact the dynamics of conservation behavior down to the appliance level. Our results, based on 374million panel observations of kilowatt-hour (kWh) electricity consumption for 118 households over 9 months, show that differences in behavioral responses due to message framing become more significant over time. We find that a health-based frame, in which households consider the human health effects of their marginal electricity use, induced persistent energy savings behavior of 8–10% over 100 days; whereas a more traditional cost savings frame, drove sharp attenuation of treatment effects after 2 weeks with no significant savings versus control after 7 weeks. We discuss implications for the design of effective information campaigns to engage households in conservation behavior.

In this paper we investigate the dual role of supply restrictions and drug treatment in combating the concurrent rise of opioid abuse and suicide in the United States over the last two decades. We find that supply-side interventions decrease suicides in places with strong addiction-help networks, implying that prescription drug abuse is associated with an inherent risk of suicide. Our findings support an important role for access to treatment services in policies designed to combat the opioid epidemic. [ABSTRACT FROM AUTHOR]

The strength model proposes that self-control is a constrained resource whose effectiveness tends to dwindle when an individual attempts to resist multiple sources of temptation at a time. We develop an economic framework for the strength model, and test its consequences in the field by analyzing the appeal of various food types by university students who face time-varying academic self-control demands. Our study utilizes both empirical analysis of actual university-wide transactions data, and a field survey approach with a real snack choice task. Compared to cafeteria purchases, purchase of less healthy fast foods increases during the week of final exams when students’ workloads are most cognitively demanding, compared to the purchase ratio of food sources during other times of the year. Helping to rule out alternative explanations, in the field survey the main robust and significant predictor of choosing an unhealthy snack over a healthy snack is subjects’ self-reported time needed to complete their academic responsibilities during the upcoming week. As combined evidence, these findings are consistent with an economic model of limited self-control in which students choose how to allocate their self-control between academic activities and eating activities. Under such a framework, the overall effectiveness of policies designed to help individuals make beneficial choices in a specific domain could be in practice, adversely affected by limited self-control capacities. [ABSTRACT FROM AUTHOR]

Two individuals are said to be revealed different if their joint decisions are more distant from rationality than either of their individual decisions taken separately. We show that the revealed different relation can be used to identify preference types and therefore to evaluate the heterogeneity of preferences in a completely nonparametric way. Using experimental data from a random sample of the Dutch population, we find that 1182 individuals can be divided into 131 different preference types, men's preferences are more heterogeneous than and different from women's preferences. These results replicate in a different decision environment. [ABSTRACT FROM AUTHOR]

This paper utilizes a high frequency dataset on taxi rides in New York City to investigate how emotions due to sporting event outcomes affect passengers’ tipping behavior. I formulate and empirically test a reference-dependent preferences framework of tipping behavior. The results indicate that the tipping amounts are driven by deviations from expectations much more so than wins and losses, with the most salient effects found under unexpected close wins. However, there is no support for loss aversion. The findings suggest that loss averse behavior may be subdued in the presence of social norms while surprises can result in freedom on the upside of tipping. [ABSTRACT FROM AUTHOR]

We study the impact of revealing personal information on the selection of partners when forming individual networks. In our experiment, a “contribution phase” is followed by a “network phase”: individuals first decide whether to contribute and then decide with whom to form a link. An exchange of contributions between individuals occurs only if a bilateral link is established. We identify the effect of revealing one's name on the probability of link formation by letting individuals choose to signal – at the linking stage – their willingness to later reveal their name. Our results indicate that this decision significantly affects partner selection and the consequent structure of the network. Individuals who reveal their name build up smaller individual networks but attain higher profits. Incurring privacy costs by revealing personal information is compensated with a higher probability to establish mutual links with contributors. [ABSTRACT FROM AUTHOR]

Whether and how changes in economic circumstances or household income affect individuals’ diet and nutritional intakes is of substantial interest for policy purposes. This paper exploits a period of substantial income volatility in Russia to examine the extent to which , as well as how individuals protect their energy intakes in the face of unanticipated shocks to household income. Using rich data from the Russia Longitudinal Monitoring Survey, our results suggest that households use substitution, disproportionally cutting back spending on non-foods to protect spending on foods, change the composition of the consumption basket, and increase the consumption of ‘cheaper’ calories. Taken together, however, we find that total energy intakes as well as the nutritional composition of the diet are almost fully protected against income shocks. Specifically, we find that 12–16% of the effect of permanent income shocks on food expenditures is transmitted to energy intakes, with 84–88% protected through insurance mechanisms. [ABSTRACT FROM AUTHOR]

The combination of credit constraints and indivisible consumption goods may induce some risk-averse individuals to gamble to have a chance of crossing a purchasing threshold. This idea has been demonstrated theoretically, but not explored empirically. We test this idea by focusing on a key implication: income effects for individuals who choose to gamble are likely to be larger than for the general population. Using UK data on gambling wins, other windfalls and durable goods purchases, we show that winners display higher income effects than non-winners but only amongst those likely to be credit-constrained. This is consistent with credit-constrained, risk-averse agents gambling to convexify their budget set. [ABSTRACT FROM AUTHOR]

This paper investigates whether the consumption of rich households provides a reference point in the intertemporal consumption choices of non-rich households. Using UK household data on food consumption, we estimate the Euler equation implied by a life-cycle model incorporating relative concerns for the consumption of rich households. According to both our OLS and GMM estimates, for the population of non-rich households as a whole, there is no evidence of such relative concerns. We also examine an alternative model of relative concerns in which households overconsume when exposed to higher reference group consumption, and find correlational evidence that this may be the case for food consumed away from home. Finally, we investigate the presence of heterogeneous relative concerns (across county and household characteristics) in both models, finding evidence of relative concerns (for consumption at the top) in counties with relatively low income inequality. This mechanism seems to operate for food consumed away from home. [ABSTRACT FROM AUTHOR]

We experimentally investigate a Bertrand market with homogenous goods in which sellers can announce the donation of a share of their profits to an existing non-profit organization. In a 2 × 2 design, we vary the credibility of announcements and the efficiency of the contributions to the public fund. We find that sellers’ donations are strictly positive independently of the credibility of the announcements, and their donations are higher if announcements are credible and efficiency is high. However, market outcomes in terms of prices and profits do not differ significantly in any treatment that allows for contributions to a public fund. Analysis of buyer decisions reveals that prices are the main driver of purchase decisions while higher donations only affect purchase decisions when they are credible and price differences are negligible. Our results indicate that under intense competition the possibility of attracting customers through corporate social responsibility activities is limited, although the constant positive level of contributions suggests that norms lead to a certain minimum level of corporate social responsibility. [ABSTRACT FROM AUTHOR]

We use a large-scale unconditional cash transfer program in Indonesia to investigate the importance of timing in shaping household consumption responses to fiscal interventions. Timely receipt of transfers yields no expenditure change relative to non-recipients. However, delayed receipt reduces expenditures by 7.5 percentage points. Ignoring heterogeneous timing leads to sizable underestimates of expenditure impacts. After considering several data-driven explanations, we reconcile these findings with models of consumption smoothing in which liquidity constraints imply asymmetric responses to positive and negative shocks. Our results parallel findings on government transfers in rich countries and yield new implications for program evaluation. [ABSTRACT FROM AUTHOR]

This paper experimentally studies the influence of aspirations on choice. Motivated by the theoretical model of Guney et al. (2015) , we consider choice problems which may include unavailable alternatives. In a choice problem, an aspiration is the most desired alternative there (available or not). In our design, we endogenously derive both aspirations and a subjective similarity notion that operates between an aspiration and other alternatives. We find that (i) choice reversals are more likely when an unavailable aspiration alternative is added into the environment than when an unavailable non-aspiration alternative is added, (ii) an available option is more likely to be chosen when there is an unavailable aspiration that is similar to it compared to when there is no such option in the environment, (iii) choices are better explained by a similarity-based procedure when the subjective similarity notion that is derived in a separate part of the experiment is used rather than the Euclidean distance. [ABSTRACT FROM AUTHOR]

We use a unique dataset on health club attendance from Montreal (Canada) to look at the relationship between actual and expected attendance, and how these relate to a reported measure of self-control problems at the time of contract signing. Consistently with previous studies, a vast majority of contract choices are unlikely to be compatible with time-consistent behavior. For 56.83% of members, the actual cost per visit with the contract is higher than the pay-per-visit option. Conditional on paying more with a subscription, we calculate that the median cost of choosing a long-term contract over the per-visit option is $346.45, excluding any commitment value. However, we compute that nearly all members would have paid less with the long-term contract if they had exercised as often as they initially planned. We study how actual attendance following contract choice is related to baseline reports of self-control. We find that reports of self-control problems are associated with low future attendance and with faster decrease in attendance, in particular after New Year, but not with expected attendance. Our results are consistent with a model of health club participation where agents underestimate the severity of their self-control problems. We find that individuals with a large gap between expected and realized attendance have a lower probability of contract renewal which has implications for mechanism design to retain customers. [ABSTRACT FROM AUTHOR]

A mezuzah is a small case affixed to the doorframe of each room in Jewish homes and workplaces which contains a tiny scroll of parchment inscribed with a prayer. It is customary for religious Jews to touch the mezuzah every time they pass through a door and kiss the fingers that touched it. However, kissing the mezuzah has also become customary for many secular Jews who think of the mezuzah as a good luck charm. In view of a recent revelation that kissing the mezuzah entails a health hazard, the present paper inquires whether it also has some observable benefit. In an experiment conducted among non-religious mezuzah-kissing economics and business students confronted with a logic-problem exam, some were allowed to kiss the mezuzah before taking the exam, whereas the others were asked not to do so or could not do so because it had been removed from the room doorframe. The experiment revealed that participants who did not kiss the mezuzah performed worse than those who kissed it, and that the stronger is one's belief in the mezuzah's luck-enhancing properties, the better he performs when he kisses it but the worse he performs when he does not. [ABSTRACT FROM AUTHOR]

Using a discrete choice experiment with real economic incentives, this paper studies how food fiscal policies and external influences (such as pestering and information) can affect parental choice of food for their child. Using pairs of a parent and child, the experimental design varies the food prices of healthier and unhealthier alternatives of food products for children as part of specific food fiscal policies. We then examine the interplay of children's pester power as well as information about the fiscal policies. The results from our lab experiment suggest that (a) implementing a fat tax and a subsidy simultaneously can shift parental behavior to healthier food products to a greater degree than a fat tax or a subsidy alone, (b) providing information regarding the food fiscal policies can further increase the impact of the intervention, and (c) child pestering is one of the causes of the moderate effectiveness of the policies as it strongly affects parents in making unhealthier choices. [ABSTRACT FROM AUTHOR]

Around 3 billion people in developing countries rely on woodfuels for their daily cooking needs with profound negative implications for their workload, health, and budget as well as the environment. Improved cooking stove (ICS) technologies appear to be an obvious solution in many cases. Indeed we find that users of a very simple ICS in urban Burkina Faso need between 20 and 30 percent less firewood compared to traditional stoves, making the investment highly profitable. In spite of these high returns and great efforts made by the international community to disseminate ICSs, take-up rates are – similar to many other high-return innovations – strikingly low; in our case a mere 10 percent. When exploring adoption decisions of households, we find suggestive evidence that a major deterrent to adoption is the upfront investment costs. They seem to be much more important than access to information, taste preferences, or the woman's role in the household. These findings suggest that perhaps more direct promotion strategies such as subsidies would help households to overcome liquidity constraints, and would hence improve adoption rates. [ABSTRACT FROM AUTHOR]

Using data from a U.S. household survey, we examine the empirical relation between subjective life horizon (i.e., the self-reported expectation of remaining life span) and portfolio choice. We find that equity portfolio shares are higher for investors with longer horizons, controlling for gender-specific age effects, socio-economic characteristics, health, and optimism. Our result is robust to accounting for the endogeneity of equity market participation or instrumenting subjective life horizon with parental survival. Finally, we show that the effect of a shortening horizon on portfolio allocation is stronger for households without bequest motives. [ABSTRACT FROM AUTHOR]

I investigate the robust predictions of a theory on the costs and benefits of dealing with increased numbers of choices in an election context. My data consist of a rich array of measures of voting behaviors and corresponding ballot and voter population characteristics for a panel of electoral districts from three Australian federal election cycles. I examine how the number of candidates and voting tickets on the ballot, as well as key moderating variables, affect the share of voters (1) opting for a simplified alternative to the baseline voting process; and (2) intentionally casting an invalid ballot. The findings indicate that incremental options can increase or decrease motivation to engage in a choice process; the overall pattern of results appears consistent with a diminishing returns model of expanded choice. Voters appear to trade off costs and benefits rationally in their decisions concerning how and whether to make choices. Public policies and private strategies should leverage moderating variables to encourage participation in choice processes and should account for opt-out tendencies at both ends of the choice spectrum. [ABSTRACT FROM AUTHOR]

Using online price comparison and shopping platforms makes experiencing slow connections, lags and waiting times for information an unfortunate reality. However, little attention has been paid to analyzing the effects of such delayed display of information on product choice behavior. This article explores the effect of time delays in a multi-attribute choice laboratory experiment by not providing information immediately when requested but after short time delays. Increasing these waiting times reduced the amount of information looked-up but did not affect choice quality. Higher time delays made decision-makers use more deliberate search processes, whereas low time delays induced inefficient over-searching. [ABSTRACT FROM AUTHOR]

Foreign currency loans by unhedged borrowers are widespread in many regions of the world. Against this background, we study whether the demand for foreign currency loans is driven by a lack of knowledge about the exchange rate risk emanating from such loans. We employ individual-level survey data from eight Central and Eastern European countries that provides information on agents’ knowledge about exchange rate risk. Results show, first, that a majority of respondents is aware that depreciations increase loan installments. Second, we find that knowledge about the exchange rate risk exerts a strong impact on the choice of the loan currency. [ABSTRACT FROM AUTHOR]

This paper reports a duopoly market experiment that examines the effects of price complexity on market prices. In my experimental posted-offer markets, each seller offers an identical good to buyers with homogeneous preferences. First, sellers simultaneously decide on the price and the tariff structure of their good, then buyers make their choices. Each seller can choose to have a one-, two- or three-part tariff. The tariff structure affects neither the value nor the price of the good but influences buyers’ ability to calculate the good's price. The main results show that high-price sellers choose high complexity more often than low-price sellers if buyers are simulated in accordance with the bounded rationality model of Carlin (2009) . However, the evidence for this effect is weaker if the buyers are human subjects. Importantly, prices are higher when the sellers can confuse buyers using price complexity than when sellers interact with perfectly rational robot buyers. [ABSTRACT FROM AUTHOR]

Energy efficiency is an important economic and environmental concern, and likewise the correction of current wasteful energy practices. We document widespread “tire pressure neglect” – three-quarters of drivers waste gas driving on underinflated tires. Negative descriptive social norms are one potential cause, but have not been tested in high-neglect environments, where those norms are widespread. This confounds the mechanism: are these norms signals of private value to consumers, or do they imply standards for social judgment from others? We conducted a field experiment at gas stations in Chicago – our intervention included treatments with information about tire pressure neglect, promotions in the form of price reductions from $0.50 to free, a descriptive norm of behavior, and “help” in the form of air pump assistance. The treatments are designed to provide the ability to consider four potential underlying drivers: information, monetary cost, social norms and social pressure. Treatments that only included information were ineffective, despite average fuel savings of $10.51, but small promotions had substantial impacts. When the air pump price was free, the social norm discouraged inflation. However, when the research assistant offered help, inflation rates were buoyed by the social norm. These results highlight the importance of incentives over mere information treatments, and offer a new perspective on how information and monetary levers can influence decision-making in the presence of negative social norms. [ABSTRACT FROM AUTHOR]

We use UK survey data to analyze the puzzling co-existence of high cost revolving consumer credit alongside low yield liquid savings in household balance sheets, which we name the ‘co-holding puzzle’. Approximately 12% of households in our sample co-hold, on average, £3800 of revolving consumer credit on which they incur interest charges, even though they could immediately pay down all this debt using their liquid assets. Co-holders are typically more financially literate, with above average income and education. In most estimates co-holding is also associated with impulsive spending behavior on the part of the household. Our results provide empirical support to theoretical models in which households co-hold as a means of managing self-control problems. [ABSTRACT FROM AUTHOR]

Many households have insufficient savings to handle moderate and routine consumption shocks. Many of these financially fragile households also have the highest lottery expenditures as a proportion of income. This combination suggests that prize-linked savings (PLS) accounts, combining security of principal with lottery-type jackpots, can increase savings among these at-risk households. Results from an online experiment show that the introduction of PLS accounts increase total savings and reduce lottery expenditures significantly, especially among individuals with the lowest levels of savings and income. The results imply that PLS accounts offer a plausible market-based solution to encourage individuals to increase savings. [ABSTRACT FROM AUTHOR]

This paper develops a theoretical model of consumer demand for an energy conservation program that involves non-binding, self-set goals. We present evidence from a Northern Illinois goal-setting program, aimed at reducing residential electricity consumption, which is difficult to reconcile with standard preferences and is broadly consistent with a model of present-biased consumers with reference-dependent preferences. We find that the need for commitment is correlated with program adoption, higher pre-adoption consumption, and lower responsiveness to goals. Consumers choosing realistic goals persistently save substantially more, achieving savings of nearly 11%, than those choosing very low or unrealistically high goals. [ABSTRACT FROM AUTHOR]

Under complicated billing structures, the price to which consumers respond remains inconclusive. In this paper, I exploit a quasi-experiment to estimate a causal effect of price for residential water customers during the introduction of increasing block rates for a North Carolina utility. Perceived price is identified through a billing anomaly in which changes in marginal and average prices move in opposite directions. Empirical results contribute evidence that residential water customers respond to average price. Average price elasticity estimates vary from −0.43 to −1.14 across the distribution of consumption in triple-difference models, with an estimate of −0.31 in the tightest bandwidth of regression discontinuity specifications. [ABSTRACT FROM AUTHOR]

We elicit subjects’ beliefs about the likelihood that they will redeem a mail-in form. Expected redemption rates exceed actual redemption rates by 49 percentage points, meaning that subjects are overoptimistic about their likelihood of redemption. We test the impact of three “nudges” on overoptimism: (1) informing subjects about a previous cohort's redemption rates, (2) reminding subjects about the redemption deadline, and (3) reducing transaction costs. The first two treatments reduced overoptimism by 7 and 8 percentage points respectively, but these effects were not significant. Only the third nudge had a significant effect and it reduced overoptimism by 26 percentage points. All three nudges increased redemption but had no statistically significant effect on beliefs. Our results suggest that weak cost-salience is an important mechanism for overoptimism. [ABSTRACT FROM AUTHOR]

We demonstrate that upward-looking comparisons induce “keeping up with the richer Joneses”-behaviour. Using data from the German Socio-Economic Panel, we estimate the effect of reference consumption, defined as the consumption level of all households who are perceived to be richer, on household consumption. When controlling for own income as well as unobserved individual and local area heterogeneity, a 1% increase in reference consumption leads households to raise own consumption by about 0.3%. At the mean values of own and reference consumption this implies that a 100 euro increase in reference consumption leads to an increase in own consumption of approximately 18 euros. Our findings establish an important microeconomic link between changing income inequality and aggregate consumption. [ABSTRACT FROM AUTHOR]

Abstract: This paper studies polydrug use patterns in Heroin and Cocaine addicts from experiments measuring drug elasticities during changes in Heroin and Cocaine prices. Heroin addicts’ demand for Heroin is inelastic; Cocaine, Marijuana, and Alcohol are complements, and Valium and Cigarettes are substitutes for Heroin. Heroin addicts’ demand for Cocaine is inelastic; Marijuana and Valium are substitutes, and Alcohol is a complement. Cocaine addicts’ demand for Cocaine is elastic; complements are Heroin and Alcohol, and substitutes are Marijuana and Valium. Cocaine addicts’ demand for Heroin is inelastic; Alcohol is a complement while Cocaine, Marijuana and Valium are substitutes. [Copyright &y& Elsevier]

This paper uses data from the 1988 to 1991 PSID to examine the relationship between parental net wealth and consumption behavior of adult children. In a model where the probability of receiving a future transfer from the parent is an increasing function of the level of parental net wealth, a non-linear relationship is expected. The results in this study are consistent with such a relationship. Parental net wealth is found to have a positive influence on children’s consumption only at very high levels. In addition, this relationship appears to apply only to parental housing wealth and not parental non-housing wealth. [Copyright &y& Elsevier]