The Multiplier Effect: How the Priming Effect Increases the Effectiveness of Behavioral Efficiency Programs

摘要

Conventional wisdom suggests that spending on energy efficiency follows the law of diminishing returns, where the lowest-hanging fruit would deliver the greatest and cheapest savings while the marginal effectiveness of each subsequent dollar spent would decrease. Following this principle, one would expect behavioral programs to be less effective in states that spend more on energy efficiency programs. However, there is an opposing view that layering behavior programs on top of existing measures could result in more effective savings. The hypothesis is that priming the market through spending on institutionalized energy efficiency can improve results from behavioral energy efficiency programs. This paper explores the relationship between historic energy efficiency spending and results from behavioral energy efficiency programs. By comparing the results of 152 behavioral energy efficiency programs with varied levels of energy efficiency spending and ACEEE state scorecard rankings, this paper applies a regression analysis to demonstrate that the priming effect has on the efficacy of behavioral energy efficiency programs. Our results indicate that if energy efficiency spend increased one standard deviation from today’s average, the efficacy of behavioral efficiency programs would rise by approximately 10%. In addition to presenting this finding, we discuss several theories as to what mechanisms may be pushing this relationship. The results explained herein could have a significant impact on both the size and composition of energy efficiency portfolios going forward. Since priming demonstrates a multiplier effect on the impact of behavioral programs, portfolios managers should consider this increased potential when designing plans to reach their efficiency goals.