Do conservation contests work? An analysis of a large-scale energy competitive rebate program

Abstract

Contests are widely used as mechanisms to incentivize efforts in various contexts, from research innovation to athletic and employee performance. This paper builds an analytical model and provides empirical evidence to assess the effectiveness of a large-scale, real-world residential energy conservation contest in Vietnam. The model suggests that contests offering multiple prizes and requiring a minimum amount of effort can effectively promote conservation. It also identifies factors that influence the conservation effort, such as the cost of effort, size of prizes, and types of contestants. To empirically estimate the effect of the energy conservation contest, this paper uses a unique confidential dataset of monthly residential electricity usage with over 45 million observations. The results indicate that the contest significantly reduced electricity consumption among contestants, and the effect of the contest could persist for months after its conclusion, leading to an average abatement cost of $27 per ton of CO2 emissions.