Shedding Light: Understanding the Role of Externalities in Energy Efficient Technology Adoption

Through a two-stage randomized control trial, we estimate the impact of energy efficient lightbulbs (compact fluorescent lightbulbs or CFLs) on household electricity consumption and local electricity reliability.  The CFL treatment reduces household electricity consumption by a quantity within the range of the technologically feasible savings.  Estimates not controlling for externalities are downward biased.   CFL distribution results in technological externalities: more intense distribution leads to two fewer days per month without electricity due to transformer-level outages. Increased electricity reliability permits households to consume more electricity services.  Finally, we find interactions between technological externalities and peer effects are critical in inducing take-up.   

Speaker: Robyn Meeks, Univ. of Michigan