Behavioral Economics in Energy Use

Behavioral economics in energy use examines how psychological factors and social influences affect individuals' decisions about energy consumption. It recognizes that people often do not act purely rationally; emotions, habits, and social norms can drive choices. For instance, people may underestimate energy costs or be swayed by peer behavior. Understanding these influences helps design effective energy-saving policies, like using clear information, nudges, or incentives, encouraging individuals to make more sustainable energy choices that benefit both them and the environment.