The effects of information on residential demand for electricity.

n the Kyushu experiment, the contribution of monitor usage to energy conservation is modest, as indicated by small estimates of the elasticity of electricity demand with respect to monitor usage. Although the elasticity of electricity demand with respect to monitor usage was found to be significant at the 1% level, its estimate was -0.015 on average. Additional day of access to the monitor, for instance, would reduce daily usage of electricity by 0.053 kWh for each household. This energy conservation corresponds to only 0.3% of the average electricity consumption in August.

The energy-conservation effect of monitor-provided information implies that consumers may have overestimated their optimal levels of electricity consumption prior to the use of the monitor. Without information about electricity usage, consumers would have used more electricity. The use of the monitor may have made consumers be aware of how much electricity they overused. The more often consumers use the monitor, the more accurately they can estimate the optimal consumption of electricity. This effect of information on electricity consumption is considered to be socially desirable as long as additional costs of providing information are less than increased surplus of consumers and environmental benefits of energy conservation.

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