Sébastien Houde

Real-time Feedback and Electricity Consumption: A Field Experiment Assessing the Potential for Savings and Persistence

Real-time information feedback delivered via technology has been reported to produce up to 20 percent declines in residential energy consumption. There are however large differences in estimates of the effect of real-time feedback technologies on energy use. In this study, we conduct a field experiment to obtain an estimate of the impact of a real-time feedback technology. Access to feedback leads to an average reduction in household electricity consumption of 5.7 percent. Significant declines persist for up to four weeks. In examining time of day reduction effects, we find that the largest reductions were observed initially at all times of the day but as time passes, morning and evening intervals show larger reductions. We find no convincing evidence that household characteristics explain heterogeneity in our treatment effects; we examine demographics, housing characteristics and psychological variables.

Spatial Development and Energy Consumption

Previous literature has suggested that the urban form (i.e., city size, density, and center distribution pattern) influences urban energy consumption. It has been argued that more dense development is likely to result in more energy-efficient and sustainable cities. However, very little is known about the precise magnitude of possible energy savings from more compact urban form. Moreover, practically no research has been done to investigate which urban policies are likely to be effective in making cities more energy efficient and to quantify those potential energy savings. In this paper we discuss the potential effectiveness of urban policies at improving energy efficiency. First, we analyze several abstract scenarios suggested by the literature to see whether making a previously dispersed city more compact would result in improved energy efficiency. Then we model realistic transportation and land-use policies and examine whether those policies are likely to reduce energy consumption in the urban context.

The decimal effect: Behavioral and neural bases for a novel influence on intertemporal choice in healthy individuals and in adhd

We identify a novel contextual variable that alters the evaluation of delayed rewards in healthy participants and those diagnosed with attention deficit/hyperactivity disorder (ADHD). When intertemporal choices are constructed of monetary outcomes with rounded values (e.g.,

Marginal Social Cost Pricing on a Transportation Network: A Comparison of Second-Best Policies

25.00), discount rates are greater than when the rewards have nonzero decimal values (e.g.,

Belt and Suspenders and More: The Incremental Impact of Energy Efficiency Subsidies in the Presence of Existing Policy Instruments

25.12). This finding is well explained within a dual system framework for temporal discounting in which preferences are constructed from separate affective and deliberative processes. Specifically, we find that round dollar values produce greater positive affect than do nonzero decimal values. This suggests that relative involvement of affective processes may underlie our observed difference in intertemporal preferences. Furthermore, we demonstrate that intertemporal choices with rounded values recruit greater brain responses in the nucleus accumbens to a degree that correlates with the size of the behavioral effect across participants. Our demonstration that a simple contextual manipulation can alter self-control in ADHD has implications for treatment of individuals with disorders of impulsivity. Overall, the decimal effect highlights mechanisms by which the properties of a reward bias perceived value and consequent preferences.

Do Energy Efficiency Standards Improve Quality? Evidence from a Revealed Preference Approach

In this paper we evaluate and compare long-run economic effects of six road-pricing schemes aimed at internalizing social costs of transportation. In order to conduct this analysis, we employ a spatially disaggregated general equilibrium model of a regional economy that incorporates decisions of residents, firms, and developers, integrated with a spatially-disaggregated strategic transportation planning model that features mode, time period, and route choice. The model is calibrated to the greater Washington, DC metropolitan area. We compare two social cost functions: one restricted to congestion alone and another that accounts for other external effects of transportation. We find that when the ultimate policy goal is a reduction in the complete set of motor vehicle externalities, cordon-like policies and variable-toll policies lose some attractiveness compared to policies based primarily on mileage. We also find that full social cost pricing requires very high toll levels and therefore is bound to be controversial.

Distributional Consequences of Public Policies: An Example from the Management of Urban Vehicular Travel

The effectiveness of investment subsidies depends on the existing array of regulatory and information mandates, especially in the energy efficiency space. Some consumers respond to information disclosure by purchasing energy-efficient durables (and thus may increase the inframarginal take-up of a subsequent subsidy), while other consumers may locate at the lower bound of a minimum efficiency standard (and a given subsidy may be insufficient to change their investment toward a more energy-efficient option). We investigate the incremental impact of energy efficiency rebates in the context of regulatory and information mandates by evaluating the State Energy Efficient Appliance Rebate Program (SEEARP) implemented through the 2009 American Recovery and Reinvestment Act. The design of the program--Federal funds allocated to states on a per capita basis with significant discretion in state program design and implementation--facilitates our empirical analysis. Using transaction-level data on appliance sales, we show that most program participants were inframarginal due to important short-term intertemporal substitutions where consumers delayed their purchases by a few weeks. We find evidence that some consumers accelerated the replacement of their old appliances by a few years, but overall the impact of the program on long-term energy demand is likely to be very small. Our estimated measures of cost-effectiveness are an order of magnitude higher than estimated for other energy efficiency programs in the literature. We also show that designing subsidies that reflect, in part, underlying attribute-based regulatory mandates can result in perverse effects, such as upgrading to larger, less energy-efficient models.

Moral Hazard and the Energy Efficiency Gap: Theory and Evidence

Minimum energy efficiency standards have occupied a central role in U.S. energy policy for more than three decades, but little is known about their welfare effects. In this paper, we employ a revealed preference approach to quantify the impact of past revisions in energy efficiency standards on product quality. The micro-foundation of our approach is a discrete choice model that allows us to compute a price-adjusted index of vertical quality. Focusing on the appliance market, we show that several standard revisions during the period 2001-2011 have led to an increase in quality. We also show that these standards have had a modest effect on prices, and in some cases they even led to decreases in prices. For revision events where overall quality increases and prices decrease, the consumer welfare effect of tightening the standards is unambiguously positive. Finally, we show that after controlling for the effect of improvement in energy efficiency, standards have induced an expansion of quality in the non-energy dimension. We discuss how imperfect competition can rationalize these results.

Measuring marginal congestion costs of urban transportation: Do networks matter?

This paper uses a spatially disaggregated computable general equilibrium model of a large US metropolitan area to compare two kinds of policies, “Live Near Your Work” and taxation of vehicular travel, that have been proposed to help further the aims of “smart growth.” Ordinarily, policy comparisons of this sort focus on the net benefits of the two policies; that is, the total monetized net welfare gains or losses to all citizens. While the aggregate net benefits are certainly important, in this analysis we also disaggregate these benefits along two important dimensions: income and location within the metropolitan area. The resulting identification of gainers and losers with these policies, though undoubtedly important to matters such as fairness and political feasibility, are rarely made. We find that these distributional effects are quite sensitive to the details of policy design.

How Consumers Respond to Environmental Certification and the Value of Energy Information

We investigate how moral hazard problems can cause suboptimal investment in energy efficiency, a phenomenon known as the energy efficiency gap. We focus on contexts where the quality offered by the energy efficiency provider is imperfectly observable. We formalize underprovision of quality and compare two policy solutions: energy-savings insurance and minimum quality standards. We then provide empirical evidence of moral hazard in home energy retrofits in Florida. We find that for those measures, the quality of which is deemed hard to observe, realized energy savings are subject to day-of-the-week effects. Specifically, energy savings are significantly lower when those measures were installed on a Friday—a day particularly prone to negative shocks on workers’ productivity—than on any other weekday. We finally specify a model to simulate the Floridian market and find that the deadweight loss from moral hazard is about twice as large as that due to associated carbon dioxide externalities.