Paternalism and Energy Efficiency: An Overview

Abstract

This article provides an overview of the application of behavioral public economics to energy efficiency. I document policy makers' arguments for “paternalistic” energy efficiency policies, formalize with a simple model of misoptimizing consumers, review and critique empirical evidence, and suggest future research directions. Although empirical results suggest that policies to address imperfect information and internalities may increase welfare in some cases, some existing policies may be mistargeted or miscalibrated.