Theoretical and Empirical Evaluation of a Competitive Energy Rebate Program

Rebates that reward economic agents if they meet a minimum conservation threshold are popular policy to encourage energy conservation. However, most threshold-based rebates structured such do not reduction beyond the threshold. In this paper, I show theoretically programs with additional feature households compete win can effectively further among those who reduction. The theory also identifies factors determine effectiveness of program. then exploit unique confidential dataset monthly residential electricity use over 45 million observations estimate overall effect Vietnamese rebate program competitive element. Next, empirically test model’s predictions. find reduces consumption by 18%, nearly double level 10%. Interestingly, program's persists for at least twelve months after it ends, which has important implications cost-effectiveness interventions.