Selection on Welfare Gains: Experimental Evidence from Electricity Plan Choice /
Ito, Koichiro.
Selection on Welfare Gains: Experimental Evidence from Electricity Plan Choice / Koichiro Ito, Takanori Ida, Makoto Tanaka. - Cambridge, Mass. National Bureau of Economic Research 2021. - 1 online resource: illustrations (black and white); - NBER working paper series no. w28413 . - Working Paper Series (National Bureau of Economic Research) no. w28413. .
January 2021.
We study a problem in which policymakers need to screen self-selected individuals by unobserved heterogeneity in social welfare gains from a policy intervention. In our framework, the marginal treatment effects and marginal treatment responses arise as key statistics to characterize social welfare. We apply this framework to a randomized field experiment on electricity plan choice. Consumers were offered socially efficient dynamic pricing with randomly assigned take-up incentives. We find that price-elastic consumers--who generate larger welfare gains--are more likely to self-select. Our counterfactual simulations quantify the optimal take-up incentives that exploit observed and unobserved heterogeneity in selection and welfare gains.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Selection on Welfare Gains: Experimental Evidence from Electricity Plan Choice / Koichiro Ito, Takanori Ida, Makoto Tanaka. - Cambridge, Mass. National Bureau of Economic Research 2021. - 1 online resource: illustrations (black and white); - NBER working paper series no. w28413 . - Working Paper Series (National Bureau of Economic Research) no. w28413. .
January 2021.
We study a problem in which policymakers need to screen self-selected individuals by unobserved heterogeneity in social welfare gains from a policy intervention. In our framework, the marginal treatment effects and marginal treatment responses arise as key statistics to characterize social welfare. We apply this framework to a randomized field experiment on electricity plan choice. Consumers were offered socially efficient dynamic pricing with randomly assigned take-up incentives. We find that price-elastic consumers--who generate larger welfare gains--are more likely to self-select. Our counterfactual simulations quantify the optimal take-up incentives that exploit observed and unobserved heterogeneity in selection and welfare gains.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.