Using field experiments to address environmental externalities and resource scarcity: major lessons learned and new directions for future research

Abstract

This article provides an overview of the use of field experiments in energy and resource economics. I concentrate on two areas of study; field experiments that (i) speak to the use of dynamic pricing plans to manage the use of electricity and water and (ii) explore the adoption of energy saving technologies. Viewed in its totality, this work suggests that both neo-classical factors, such as prices or search costs, and behavioural constructs, such as salience or social norms, influence the use of energy and water. For academics, the studies reviewed provide a deeper understanding of individual behaviour and the factors that drive the private provision of public goods. For policy-makers, the studies reviewed provide a blueprint outlining ways to combine insights from neo-classical and behavioural economics to manage energy/water demand and mitigate externalities generated through their use.