More money or better procedures? Evidence from an energy efficiency assistance program

Arbeitspapier

We contribute to the literature on how program design affects program performance among vulnerable groups by studying the effects of varying the subsidy level and program procedures in an energy efficiency assistance program targeting low-income households in Germany. Eligible households receive, upon enrolment, a voucher to subsidize refrigerator replacement. The voucher is redeemed against cash following replacement. Observing the decisions of 77,305 eligible households, our RDD design exploits two quasi-exogenous temporal discontinuities in voucher value and program procedures. We find that a switch from automatic to elective enrolment and more rigid voucher terms reduces the number of vouchers in circulation, but raises the replacement rate among eligible households, the key performance metric, by 4 to 10 percentage points, consistent with psychological theories of goal setting and time management. A subsidy increase of e50 raises replacement rates by 9 to 16 percentage points. The effect of procedural changes is equivalent to an additional e34 in subsidy. Back-of-the-envelope calculations highlight that low-cost changes in procedures that target the behavioral responses of low-income households represent plausible areas of unexploited economies in program design and merit systematic investigation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: MAGKS Joint Discussion Paper Series in Economics ; No. 25-2022

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities ; Intertemporal Household Choice; Life Cycle Models and Saving ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Technological Change: Choices and Consequences; Diffusion Processes ; Renewable Resources and Conservation: General
• Subject: Public behavioral economics ; energy efficiency ; low-income households ; durable replacement ; energy poverty ; technology adoption

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chlond, Bettina ; Goeschl, Timo ; Kesternich, Martin
• Event: Veröffentlichung
• (who): Philipps-University Marburg, School of Business and Economics
• (where): Marburg
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/266023
• Last update: 10.03.2025, 11:43 AM CET