The Economic Value of Habits in Household Production: A Field Experiment
Research output: Working paper › Research
People are prone to habits but how important are they for economic outcomes? In a randomized field experiment we compare two treatments with identical economic incentives to adjust a range of household production activities. Treatments only differ in the extent to which they allow households to adjust habits relevant for these activities. We utilize smart-metered hourly power consumption to unobtrusively measure treatment effects. We find that preventing habits from being adjusted reduces consumer surplus by 76% suggesting a substantial economic value of habits.
Original language | English |
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Publisher | Department of Food and Resource Economics, University of Copenhagen |
Number of pages | 34 |
Publication status | Published - 2018 |
Series | IFRO Working Paper |
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Number | 2018/01 |
ID: 188908885