You'll Read This More Closely If You Know We're Watching You Read It

Photographer: Greg Nicholas

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Photographer: Greg Nicholas

Customers of an undisclosed mid-Atlantic utility in 2011 received a series of five postcards in the mail informing them that their electricity use would be studied for a month. Their role was passive; they needn't do anything to participate. Just act normal and be studied.

The Carnegie Mellon researchers who dispatched the postcards were flirting with the sin of omission. They did hope to study the customers' electricity use — specifically, how it might change as they received postcards informing them of a study. Turns out it did. "Residential customers who received weekly postcards informing them that they were in a study reduced their monthly use by 2.7% — an amount greater than the annual conservation goal currently mandated by any state."

The interdisciplinary team was using residential electricity consumption to study the Hawthorne effect, named after a factory that the Western Electric Company operated outside of Chicago nearly a century ago. The plant in 1924 became the site of well-known studies on how artificial light affected workers. An increase in productivity attributed to lights was later found to be psychological; the workers produced more when they knew they were being watched.

Thus was born the Hawthorne effect, the ever-present possibility that a study of human behavior changes the human behavior under study.

The Carnegie Mellon paper, published this week by the Proceedings of the National Academy of Sciences, and other behavioral research like it have potentially useful implications for policy and business. Take Opower, based in Arlington, Virginia, which began in 2007 using behavioral techniques to wring waste from electricity use. It's become a company of more than 400 employees that has worked with 85 utilities and saved more than 2.7 billion kilowatt-hours of electricity.

The hope of behavioral research is that little tweaks, reminders, pointers — nudges, as Richard Thaler and (Bloomberg View columnist) Cass Sunstein called them in their 2009 book -— can catalyze change vastly disproportionate to the effort they require.

The Carnegie Mellon group, which includes social scientist Baruch Fischhoff, explains one of the unknowns in their study. "It is possible that it" — sending postcards, in their example — "would lose effect over time, as consumers habituate to the messages, or have increasing effect, as awareness becomes routine and energy-savings behaviors a matter of habit," they write.

Or, behavioral efforts might provoke backlash. One challenge is, I've observed, people don't always like being scrutinized. Whether it's the drug store bar code hanging from our key rings, traffic cameras or the NSA's snooping on Americans, we're already being watched and studied quite a bit.

Maybe a little bit more surveillance wouldn't hurt, if it's for a good cause. Maybe it would get annoying and we'd feel powerless to do anything. Maybe both.

Analysis and commentary on The Grid are the views of the author and don't necessarily reflect the views of Bloomberg News.

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