Anant Sudarshan, Institute for Finance Management and Research, Chennai & Harvard University

I use a randomized field experiment to evaluate the impact of providing regular peer comparisons of electricity consumption to urban middle-class households in India.  I compare this with the impact of providing the same comparisons, linked to additional financial incentives. I find that the pure behavioral intervention is able to generate sustained reductions of the order of 11 percent of electricity consumption over the summer. However the addition of financial incentives to the provided information leads to a significant deterioration in impact.  This result is consistent with psychological theories of extrinsic and intrinsic motivation. The experiment design used enables us to observe impacts separately on high and low priced electricity. I consider implications for the use of incentives more generally.