Dollars or Sense: Economic versus Social Rationality in Residential Energy Consumption

Panel: Human and Social Dimensions of Energy Use: Trends and their Implications

Authors:
Karen Ehrhardt-Martinez, American Council for an Energy-Efficient Economy
John A. "Skip" Laitner, American Council for an Energy-Efficient Economy
Wendy Reed, Consultant

Abstract

Residential energy consumption is often conceived of as a social problem in need of a technological solution that would allow consumers to use energy more efficiently and thus use less energy. Nevertheless policy makers and researchers are increasingly recognizing the importance of also addressing behavioral change in efforts to reduce energy consumption and carbon emissions as most energy-efficient technologies require proper human interaction to achieve their promised savings. One recent example of the growing interest in the topic of behavior change is the large turnout at the Behavior, Energy and Climate Change Conference1.

Although the renewed interest in behavior is decidedly needed, there remains a tendency to frame behavioral change almost exclusively as a matter of individual choice, and predominantly in terms of rational economic actors. Unfortunately, there is much evidence to suggest that people often do not act on economic or rational self-interest alone. In fact, people often find it difficult to do so. Instead, some studies suggest that individual behavior is also shaped in important ways by the social context within which people operate. In many instances, individuals are likely to behave as rational social actors who determine what is and isn't "appropriate" behavior by gleaning information from their own observations and interactions within their sphere of social influence.

This paper explores the ways in which social rules, resources and context shape individual patterns of energy consumption. More specifically, the paper will consider the ways in which social norms, social networks, social status and social context all influence individual behavior and residential energy consumption. In broadening this perspective, our hope is to improve program design and assessment as well as policy analysis based on such assessments.