RAPID: The Impact of Stimulus Spending on Energy Efficiency in a Low-Income Dallas Neighborhood: Implications for Science Policy

An important part of the science stimulus is to improve household energy efficiency. However, the effective implementation of such policy requires understanding how individuals and households behave in response to economic incentives. The research advances knowledge about the way improvements in the energy efficiency of residential homes impact the actual consumption of energy by residents. Without knowledge of the behavioral factors that influence energy consumption, policymakers may underestimate the results of science policy programs that are designed to conserve energy.

There are multiple ways in which the research provides an important advance in understanding what financial and behavioral factors influence the extent to which low income people take advantage of government energy programs.

At the micro level, the research addresses such questions as whether risk-averse individuals are particularly reluctant to participate in incentive programs, possibly because they have few margins on which to reduce their consumption.

The research also further advances the scientific understanding of the impact of unintended consequences. For example, increasing the efficiency of air conditioning systems, may reduce the amount of time individuals spend on their porch or in their front yards, and negatively affect neighborhood unity and safety. Similarly, increasing car fuel efficiency may increase the likelihood of driving with consequent negative impacts on health outcomes.

The research may also provide scientific guidance for program implementation, in that it can measure organizational trust (and provide guidance about which governmental unit should implement policy), individual time preference (and provide guidance about whether up-front expenditures that are subsequently reimbursed are more effective than expenditures which involve no out-of-pocket expenses) and measures of social preference (whether households participate out of self-interest, local altruism or larger-scale altruism).

The project builds on an existing NSF funded project infrastructure that collects baseline and post-ARRA (American Recovery and Reinvestment Act) energy usage data for a sample of households in a low-income neighborhood of Dallas, TX. For a subset of households, the study also includes collection of individual-level measures of preferences, derived from economic experiments, including risk, time, and cooperative preferences, as well as measures of trust in individuals and institutions. The study combines these with the measures of energy usage to help understand the source of unintended consequences.

The research has a number of broader impacts. It advances the scientific understanding of how to design energy efficiency programs funded by AARA by adding a behavioral dimension to the evaluation of science policy. The research also investigates the behavior of residents in a low-income urban neighborhood and advances understanding of the preferences of this understudied demographic segment.