Creating pro-environmental behavior change: Economic incentives or norm-nudges?

Abstract

To mitigate global warming, collective behavior change is needed. But which tools should policymakers prioritize: economic incentives, nudges, or a combination? Current evidence from social science provides little direct advice, as it either lacks credible identification of causality or objective long-term behavioral data. Addressing both limitations, we present causal evidence from a two-year field experiment, comparing how a small price incentive and a social norm-nudge affect the recycling behavior of more than 2,000 households. The results show a large, immediate, and persistent positive effect of incentives on both the quantity and quality of recycling, but no effect of the norm-nudge. However, the price incentive reduced customer satisfaction, unless it was combined with the norm-nudge, suggesting that appealing to norms can make climate incentives more acceptable.