Residential Gas Savings during Peak Prices - Evidence from the Field

Abstract:

The energy crisis in the winter of 2022/2023 forced many European countries to replace natural gas imports from Russia as quickly as possible and to drastically reduce gas consumption in the shortest possible time. Gas saving programs therefore served as an important instrument to encourage private households to make additional savings through financial incentives. This paper provides empirical evidence on the performance of a gas saving program of one of the largest German energy suppliers. The study combines survey data and a natural field experiment to analyze the effectiveness of the program, focusing on program participation and a behaviorally-informed program design.

The results shows that the gas savings program was primarily adopted by high-income and socially motivated households, which in turn led to significant gas savings, often exceeding the subsidized amounts. The field-experimental intervention indicates that reminding households of self-imposed savings targets and the financial incentives can only moderately encourage further savings during peak-prices. A social comparison nudge could even lead to a boomerang effect for some households. Our findings underscore the complexity of designing effective gas savings programs that strive for a balance between program effectiveness and the broadest possible program participation.