Heterogeneity and Habit Formation in the Effect of Demand Side Management Stimuli on Residential Gas Consumption

Feedback on residential energy consumption has long been identified as an effective demand side management (DSM) instrument to encourage household energy conservation. This paper explores the heterogeneous treatment effects of... [ view full abstract ]

Feedback on residential energy consumption has long been identified as an effective demand side management (DSM) instrument to encourage household energy conservation. This paper explores the heterogeneous treatment effects of a DSM programme on residential gas consumption across different groups of households categorised by their socio-economic and household characteristics. The programme was employed in Ireland's Smart Metering Gas Consumer Behavioural Trial and the demand stimuli tested consisted of informational feedback on a household's gas usage. The paper also investigates the impact of the stimuli over time and across the distribution of daily household gas consumption. The demand stimuli are found to have very different effects across the socio-economic and dwelling characteristics of the households with older and larger households and dwellings revealed to be much more responsive to the feedback. Additionally, the impacts are found to be persistent over time and the results provide evidence that the feedback encourages habit formation.