Conserving resources: can real time data change consumer habits?

This research project investigates if real time feedback on energy and water consumption can be used by utility companies to change the habits of consumers, and drive environmental change.

Thinking Fast and Slow: Large Scale Field Experiments on Habit Formation and Water Conservation

Recent advances in information technology are revolutionising the energy and resource sector, with electricity, water, and gas companies now able to generate 'big data' on household resource consumption.

This data can be leveraged to generate large-scale behavioral change, for example, by providing households with real-time feedback on resource use, companies can help households reduce their bills and environmental footprint.

However, a household's ability to develop resource-conserving habits is critical to the success of new technologies in generating sustained behavioural change.

Theories of habit formation in economics provide a theoretical framework for understanding and predicting the impacts of technology on resource conservation. Yet despite their prevalence and importance, little is known empirically about how habits are formed at the microeconomic level.

Is habit formation a smooth or discrete process and what are the implications of habit formation for the impact of technological interventions on resource conservation?

How long should an intervention be implemented before permanent behavioural change is established?

This project is funded by a Faculty of Business and Economics research grant and aims to overcome the empirical challenge of identifying habit formation from observational data through an innovative randomised control trial.

The research team will also investigate how technology can be used to create permanent behavioural change to help overcome problems of water scarcity?