Tuesday, 21 November 2023

Nudging techniques to cut energy bills

An unhappy face and a comparison with the neighbours' consumption convince users to waste less

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According to a study conducted at the Consumer Neuroscience Laboratory (NCLab) of the Department of Economics and Management of the University of Trento, using personalized energy feedback in the form of an unhappy emoticon, which tells consumers that they have used too much power, can convince them to adopt more sustainable behaviours. 

Inflation of energy prices and, in general, the increased cost of living, call for a review of consumption habits. Based on the latest Censis report "Italiani e sostenibilità: tra sobrietà, transizione energetica e benessere" (Italians and sustainability: moderation, energy transition and well-being), in 2023, 71.5% of the Italian population reduced lighting and heating consumption because of the increase in prices. 

The study of the University of Trento, in line with this trend, aims to help consumers use energy more efficiently and make them more aware of their energy consumption by providing them with very accurate information. To do this, the researchers used an experimental and neuroscientific methodology for the analysis of emotions: They examined and compared the behavioural and physiological reactions of the participants in the study to different types of energy feedback. 

In the control group, as in conventional energy bills, the participants only received information on their consumption and energy costs. In the experimental group, on the other hand, the participants received the same information on their mobile phone, together with an unhappy smiley for excessive consumption. The researchers also provided an additional piece of information: their neighbours' energy consumption, to compare habits, costs and savings.

The study – "Emozioni per un consumo energetico sostenibile: un’indagine psicofisiologica" (Emotions for sustainable energy consumption: a psychophysiological investigation) –  was conducted thanks to a partnership between the University of Trento and the National Council of Consumers and Users (CNCU), and the findings were presented in Genova during the 21st edition of the CNCU-Regions planning meeting, promoted by the National Council of Consumers and Users. "The starting point for our study was to understand whether the different way we communicate excessive consumption can have an impact on the consumer's will to reduce consumption. The answer is yes and we have demonstrated it experimentally," explains Nicolao Bonini, head of the Consumer Neuroscience Laboratory (NCLab) and coordinator of the project, which was conducted with the collaboration of researcher Alessia Dorigoni. The researchers used a behavioural approach based on nudging strategies: this technique does not awards incentives, economic rewards or punishments, but employs psychological techniques to achieve the goal which, in this case, is the reduction of energy consumption. Nudging makes people choose certain options over others without giving them the feeling that they are forced to do so. 

"There are two elements that play a key role in our study – emphasizes Bonini. The message the consumers receive on their phone telling them that they have consumed ten percent more than their neighbour. This is new compared to the conventional bill that usually reports consumption in kilowatt hours and costs. This social element of comparison with the neighbours increases the likelihood that the consumer decides to reduce electricity consumption by about three times. In addition to this, the unhappy smiley, which is angry because energy has been wasted, increases the amount of this reduction by three percent." The study interviewed 300 consumers from Trentino and was carried out at the Consumer Neuroscience Laboratory (NCLab), which is equipped with sophisticated instruments that measure physiological data to analyse the neuro-psychological mechanisms that drive economic choices, combining psychology and economics.

"The participants in the study were tested in a simulation in the laboratory on receiving the message on their mobile phone. We measured emotional sweating, facial expression and eye movements, which are spontaneous reactions. A consistent fact emerged about sweating: when people are elicited with the emotional feedback (unhappy emoji) and the comparison with their neighbours, they sweat more than those in the control group, which indicates greater negative emotionality. With our equipment we can view what the participants are looking at, for how long, measure pupil dilation, sweating, changes in the heart beat. All these psychophysiological indices make it possible to measure emotionality directly. In this way we integrate conscious verbal data with other unconscious data."

Could such a project open the way to new marketing and consumer policies? "If policymakers – he reflects – encouraged electricity suppliers to use these techniques, which are called behavioural programmes for the reduction of energy consumption and are widely used abroad, we would achieve the same results that others have achieved at international level. These techniques reduce kilowatt hours consumed by 2.5 percent, and the results of our research are in line with this data. The intentions of the consumers we interviewed reflect the reactions at the behavioural level in other countries of the world."