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Luis Mundaca

Luis Mundaca

Professor

Luis Mundaca

New Perspectives on Green Energy Defaults

Author

  • L. Mundaca
  • H. Moncreiff

Summary, in English

This paper is an attempt to provide new perspectives on green energy defaults (GED) that promote the purchase of renewable energy electricity (REe) among consumers. We aim to complement existing studies and improve the understanding of GED, particularly when they are less, or unexpectedly, effective. To that end, we run a randomized controlled experiment and take the UK as a case study. We replicate the research design of previous lab experiments for comparative reasons. We also expand the analytical framework, identify key determinants and compare stated versus revealed preferences. Initial results indicate a lack of effectiveness across all treatment groups. This seems to challenge most of the existing lab experimental evidence and questions external validity claims. In addition to the actual treatments, current tariff agreements appear as significant determinants of choices. Nevertheless, when stated and revealed preferences are analysed, statistical tests revealed positive and significant differential effects, suggesting that the sole provision of an explicit, simple decision framework can trigger a greater adoption of REe, even in an opt-in treatment scenario. We thus argue that GED can still influence consumer decision-making in the desired policy direction. However, outcomes are likely to be context-specific so policy generalisations are not advisable. Building upon existing knowledge and our experimental results, we propose various motivational and contextual issues affecting consumer behaviour and thus the effectiveness and suitability of GED. They can offer guidance for future GED studies, particularly in countries in which market and consumer policy conditions for REe may be less advanced or certain.

Department/s

  • The International Institute for Industrial Environmental Economics

Publishing year

2021

Language

English

Pages

357-383

Publication/Series

Journal of Consumer Policy

Volume

44

Issue

3

Document type

Journal article

Publisher

Springer

Topic

  • Economics

Keywords

  • Behavioural economics
  • Consumer policy
  • Green energy defaults
  • Policy evaluation
  • Policy experimentation
  • Renewable energy electricity

Status

Published

ISBN/ISSN/Other

  • ISSN: 0168-7034