Boosting vs. Nudging in Low Income Situations : Evidence from an Artefactual Field Experiment

Identifying the most effective behaviour change interventions to promote energy conservation in residential buildings has been the topic of extensive empirical research, in recent times. While existing literature has advised several successful behaviourally-informed policies, the context-dependency of these interventions is still an open question, even in relation to important determinants of energy consumption such as income-level. Furthermore, the existing evidence both in the field and the lab has primarily focused on trialling nudges, that is, interventions that target desired behaviour directly. Boosts on the other hand, which operate instead by targeting the competences of decision-makers, are still under-researched in this domain.The present study addresses these gaps in the literature. We present the results of an artefactual field experiment where we compare the effects of a nudge-like intervention and a boost-like intervention on decisions in an incentive-compatible energy management task. These interventions are trialled in a relatively high-income population and a relatively low-income population, to uncover their context-dependency. Finally, we replicate the experiment with the same sample population after removing the interventions.Our results show that income is a determinant of performance in our energy consumption task, with the higher income cohort performing significantly better than the lower income counterpart. However, we find that this difference is largely explained by underlying idiosyncratic factors, namely cognitive competences. Furthermore, participants from different income groups respond differently to the interventions, but overall the nudging approach emerges as the most effective strategy. Finally, we report evidence of intertemporal spillovers associated to our interventions