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Video December 8, 2020

The Implications of Behavioral Economics for Public Utility Policies

The provision and pricing of water and electricity services are perennial policy concerns in developing countries. In this talk delivered on December 8, 2020, World Bank economist Hanan Jacoby helped bridge the gap between the cognitive limitations of consumers flagged by behavioral economics and the policy questions faced by public utilities the world over. The talk drew on recent research in Vietnam, where unique experiments were undertaken in partnership with both a water and an electricity service provider. The electricity experiment allows a study of consumer inattention and the value of providing real-time usage information, while the piped water experiment addresses how new utility services should be priced when consumers unwittingly form habits.