TY - UNPB

T1 - The Economic Value of Habits in Household Production

T2 - A Field Experiment

AU - Bejan, Ioana

AU - Jensen, Carsten Lynge

AU - Andersen, Laura Mørch

AU - Hansen, Lars Gårn

PY - 2018

Y1 - 2018

N2 - 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.

AB - 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.

M3 - Working paper

T3 - IFRO Working Paper

BT - The Economic Value of Habits in Household Production

PB - Department of Food and Resource Economics, University of Copenhagen

ER -