<DOC>
[110th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:37984.wais]
THE CONTRIBUTION OF THE SOCIAL
SCIENCES TO THE ENERGY CHALLENGE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON RESEARCH AND
SCIENCE EDUCATION
COMMITTEE ON SCIENCE AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 25, 2007
__________
Serial No. 110-55
__________
Printed for the use of the Committee on Science and Technology
Available via the World Wide Web: http://www.house.gov/science
______
U.S. GOVERNMENT PRINTING OFFICE
37-984 PDF WASHINGTON DC: 2007
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COMMITTEE ON SCIENCE AND TECHNOLOGY
HON. BART GORDON, Tennessee, Chairman
JERRY F. COSTELLO, Illinois RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas F. JAMES SENSENBRENNER JR.,
LYNN C. WOOLSEY, California Wisconsin
MARK UDALL, Colorado LAMAR S. SMITH, Texas
DAVID WU, Oregon DANA ROHRABACHER, California
BRIAN BAIRD, Washington KEN CALVERT, California
BRAD MILLER, North Carolina ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois VERNON J. EHLERS, Michigan
NICK LAMPSON, Texas FRANK D. LUCAS, Oklahoma
GABRIELLE GIFFORDS, Arizona JUDY BIGGERT, Illinois
JERRY MCNERNEY, California W. TODD AKIN, Missouri
LAURA RICHARDSON, California JO BONNER, Alabama
PAUL KANJORSKI, Pennsylvania TOM FEENEY, Florida
DARLENE HOOLEY, Oregon RANDY NEUGEBAUER, Texas
STEVEN R. ROTHMAN, New Jersey BOB INGLIS, South Carolina
JIM MATHESON, Utah DAVID G. REICHERT, Washington
MIKE ROSS, Arkansas MICHAEL T. MCCAUL, Texas
BEN CHANDLER, Kentucky MARIO DIAZ-BALART, Florida
RUSS CARNAHAN, Missouri PHIL GINGREY, Georgia
CHARLIE MELANCON, Louisiana BRIAN P. BILBRAY, California
BARON P. HILL, Indiana ADRIAN SMITH, Nebraska
HARRY E. MITCHELL, Arizona PAUL C. BROUN, Georgia
CHARLES A. WILSON, Ohio
------
Subcommittee on Research and Science Education
HON. BRIAN BAIRD, Washington, Chairman
EDDIE BERNICE JOHNSON, Texas VERNON J. EHLERS, Michigan
DANIEL LIPINSKI, Illinois ROSCOE G. BARTLETT, Maryland
JERRY MCNERNEY, California RANDY NEUGEBAUER, Texas
DARLENE HOOLEY, Oregon DAVID G. REICHERT, Washington
RUSS CARNAHAN, Missouri BRIAN P. BILBRAY, California
BARON P. HILL, Indiana
BART GORDON, Tennessee
RALPH M. HALL, Texas
JIM WILSON Subcommittee Staff Director
DAHLIA SOKOLOV Democratic Professional Staff Member
MELE WILLIAMS Republican Professional Staff Member
MEGHAN HOUSEWRIGHT Research Assistant
C O N T E N T S
September 25, 2007
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Brian Baird, Chairman, Subcommittee
on Research and Science Education, Committee on Science and
Technology, U.S. House of Representatives...................... 7
Written Statement............................................ 8
Statement by Representative Vernon J. Ehlers, Ranking Minority
Member, Subcommittee on Research and Science Education,
Committee on Science and Technology, U.S. House of
Representatives................................................ 9
Written Statement............................................ 11
Witnesses:
Dr. Robert B. Cialdini, Regents' Professor of Psychology and
Marketing, Arizona State University
Oral Statement............................................... 12
Written Statement............................................ 14
Biography.................................................... 16
Dr. Duane T. Wegener, Professor of Psychological Sciences;
Initiative Leader for Social, Economic, and Political Aspects
of Energy Use and Policy, Energy Center at Discovery Park,
Purdue University
Oral Statement............................................... 17
Written Statement............................................ 19
Biography.................................................... 34
Mr. John ``Skip'' Laitner, Visiting Fellow and Senior Economist,
American Council for an Energy Efficient Economy
Oral Statement............................................... 35
Written Statement............................................ 36
Biography.................................................... 48
Dr. Jerry Ellig, Senior Research Fellow, Mercatus Center at
George Mason University
Oral Statement............................................... 48
Written Statement............................................ 50
Biography.................................................... 55
Dr. Robert F. Bordley, Technical Fellow, Vehicle Development
Research Laboratory, General Motors Corporation
Oral Statement............................................... 56
Written Statement............................................ 58
Biography.................................................... 60
Discussion....................................................... 67
THE CONTRIBUTION OF THE SOCIAL SCIENCES TO THE ENERGY CHALLENGE
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TUESDAY, SEPTEMBER 25, 2007
House of Representatives,
Subcommittee on Research and Science Education,
Committee on Science and Technology,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:04 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Brian
Baird [Chairman of the Subcommittee] presiding.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
hearing charter
SUBCOMMITTEE ON RESEARCH AND SCIENCE EDUCATION
COMMITTEE ON SCIENCE AND TECHNOLOGY
U.S. HOUSE OF REPRESENTATIVES
The Contribution of the Social
Sciences to the Energy Challenge
tuesday, september 25, 2007
10:00 a.m.-12:00 p.m.
2318 rayburn house office building
1. Purpose
On Tuesday, September 25, 2007, the Subcommittee on Research and
Science Education of the House Committee on Science and Technology will
hold a hearing to examine how research in the social sciences,
including the behavioral and economic sciences, contributes to the
design, implementation and evaluation of effective policies for energy
conservation and efficiency.
2. Witnesses
Dr. Robert Bordley, Technical Fellow, Vehicle Development Research
Laboratory, General Motors Corporation
Dr. Robert Cialdini, Regents' Professor of Psychology and Marketing,
Arizona State University
Dr. Jerry Ellig, Senior Research Fellow, Mercatus Center, George Mason
University
Mr. John ``Skip'' Laitner, Visiting Fellow and Senior Economist,
American Council for an Energy Efficient Economy
Dr. Duane Wegener, Professor of Psychological Sciences, Purdue
University
3. Overarching Questions
<bullet> What contribution do the social sciences make to our
ability to predict or evaluate the effectiveness of public
policies in changing individual and collective behavior related
to energy use?
<bullet> What new and continuing areas of basic research in
the social sciences could significantly improve our ability to
design effective policies? What new technologies and
methodologies are enabling advances in the research? Are there
promising research opportunities that are not being adequately
addressed?
<bullet> To what extent are policies (both private and
government) to influence energy consumption patterns actually
being shaped by what has been learned from the social sciences?
4. Federal Spending on Social, Behavioral and Economic Sciences
Basic and applied research in the social, behavioral and economic
(SBE) sciences is funded out of a number of federal agencies, including
the National Science Foundation (NSF), the National Institutes of
Health (NIH) as well as other agencies within the Departments of Health
and Human Services, Agriculture, Commerce, Defense, Education, Homeland
Security, Housing and Urban Development, Interior, Justice, Labor,
State and Transportation. The National Endowment for the Humanities and
the Smithsonian Institution also provide some funding in these areas.
Notably, given the topic of this hearing, the Department of Energy does
not have a program of social science research applied to the energy
challenge.
According to research funding statistics compiled by NSF\1\, a
total of just over $1 billion was obligated to basic and applied
research in all social sciences for fiscal year 2004 (FY04), including
$200 million for economics. Psychology was counted separately, and was
funded at a total of $1.85 billion in FY04, of which $1.7 billion was
funded by NIH and over $90 million was funded by DOD and Veterans
Affairs. The primary interest of those three agencies is the medical
aspect of psychology.
---------------------------------------------------------------------------
\1\ Data are based on self-reporting by agencies. In many cases,
especially where there is interdisciplinary work, it is hard to tally
exact dollars spent on one field or another, so these values are at
best an estimate.
---------------------------------------------------------------------------
The main support for basic research in the social sciences comes
from the SBE Directorate at NSF. Overall, NSF accounts for 61 percent
of federal support for basic research in anthropology, social
psychology and the social sciences at U.S. colleges and universities.
In some fields, including archaeology, political science, linguistics,
and non-medical aspects of anthropology, psychology, and sociology, NSF
is the predominant or exclusive source of federal basic research
support. The NSF SBE budget request for fiscal year 2008 (FY08) is $220
million, an increase of 3.9 percent over FY07. In addition to funding
basic research in the social, behavioral and economic sciences, NSF's
SBE Directorate funds the collection and analysis of data on science
and engineering research, education and workforce trends (including the
data presented here), resulting in the biannual ``S&E Indicators.''
This activity accounts for $31 million in FY08, or approximately 15
percent of the SBE Directorate budget.
5. Social, Behavioral and Economic Sciences and the Energy Challenge
A key part of the solution to our energy challenge is the
development of more efficient, cleaner energy technologies. This is a
primary mission of the Department of Energy. However, while it may be
impossible to quantify, individual and collective behavior also plays
an important role, not just through direct use of energy, but also by
creating or failing to create market demand for more energy efficient
technologies. Individuals across the United States make decisions every
day about what vehicle or appliance to purchase, whether to drive or
take public transportation, what light bulbs to install, whether to
shut down their computers at night. Each one of these decisions, from
turning off the computer to buying a 35 mpg sedan versus a 15 mpg SUV,
has an impact on the supply and demand curve that drives both energy
prices and energy technology development, has some environmental
footprint, and in the case of oil and natural gas, may have an impact
on national security.
These impacts are generally quantified in the aggregate, based on
data collected by the Energy Information Administration. In 2005, U.S.
households consumed 21 quadrillion BTU (quad) of primary energy,
accounting for 21 percent of total U.S. energy consumption. To put this
in perspective, people in the United States consume 2.4 times as much
energy at home as those in Western Europe, in large part because our
homes are twice as large and not designed for energy efficiency,
despite the availability of affordable technologies to make them so.
Household vehicles account for an additional 14 quad or 14 percent of
primary energy, resulting in an overall household total of more than
one-third of annual U.S. energy consumption.
In 2005, the National Academy of Sciences (NAS) produced a report
on ``Decision-Making for the Environment: Social and Behavioral Science
Research Priorities.'' Much of the research called for in the report is
of an applied nature--for example, quantifying the environmental or
economic impact of every minute action, such as running the clothes
dryer during peak hours instead of off-peak hours. Information such as
this might help policy-makers prioritize efforts and could even
stimulate technological innovation, but it isn't clear that such
information would actually influence consumer behavior. In the chapter
on Environmentally Significant Individual Behavior, the NAS panel
states that, ``A basic understanding of how information, incentives,
and various kinds of constraints and opportunities, in combination with
individuals' values, beliefs, and social contexts, shape consumer
choice in complex real-world contexts would provide an essential
knowledge base for understanding, anticipating, and developing policies
for affecting environmentally significant consumer behavior.''
Energy-related behavior is significant not just to the environment,
but to the consumer's own monthly expenses, to the economy as a whole,
and to national security. The National Science Foundation is not
responsible for generating the needed data on environmental and
economic impact called for in the NAS report, or for sharing it with
the public. However, NSF does fund the basic research in the social,
behavioral and economic sciences that can help inform policy-makers at
all levels in the development, implementation and evaluation of
information campaigns, incentives programs, regulations and other
public policies to change how we use energy in this country.
A similar story can be seen in the recent history of smoking in the
United States. Changing societal norms resulted in a society that is
now hostile to smokers and as such have greatly reduced the number of
smokers, resulting in reduced health risks for individuals and a
reduced burden on our collective health system. But linking smoking to
lung and other cancers was not sufficient to bring about this decrease.
Nor was the knowledge that second-hand smoke was harmful to others.
Advertising by tobacco companies still made smoking look ``sexy'' just
as car company advertisements make large SUV's look very appealing to
the typical consumer. In addition to laws restricting advertising, and
the near elimination of smoking from movies and television (the
characters who light up in today's movies are typically the ``bad
guys''), public officials and non-profit organizations launched major
information campaigns targeted at different populations. Many of those
information campaigns failed to influence smoking behavior, in
particular among youth. Social and behavioral researchers eventually
helped to determine what kinds of advertisements and other anti-smoking
campaigns work for which target populations.
There are many parallels to behavior and persuasion in the energy
challenge. A 2003 survey commissioned by the Alliance to Save Energy
found that an overwhelming majority of consumers (92 percent) agree
that business, government, and consumers have an equal responsibility
to reduce energy use. But attitudes have not translated into action.
Social science researchers can help create and provide information in
an understandable manner, a particularly challenging task in the case
of energy; determine how information interacts with all of the other
factors listed by the NAS panel to affect consumer behavior; understand
variation in these interactions across subsets of the population; and
work with policy-makers to help shape targeted information campaigns
and policies.
The Department of Energy launched an ``Energy Hog'' energy
efficiency campaign in 2004. The Energy Hog website provides useful
information to consumers about how to save energy without spending a
lot of money. Such information, however, is primarily reaching those
self-selecting consumers who actively seek it. The majority of
Americans, despite concern for both the environment and rising energy
prices, simply don't consider energy in their own behavior or in that
of their neighbors. The purpose of this hearing is to explore the basic
research that could help policy-makers understand why attitudes about
energy don't currently translate into action.
6. Questions for Witnesses
Dr. Robert Bordley
<bullet> Please describe the type of market research you do
for GM and how your background and experience as a social
scientist influences your work.
<bullet> What has social science research revealed about
factors that influence an individual's vehicle purchasing
decisions? What questions remain unanswered? Have you looked
specifically at the issue of fuel economy?
<bullet> How are recent breakthroughs in research incorporated
into marketing or business strategies? What role might the
National Science Foundation play in building bridges between
academic social science researchers and government and industry
policy-makers?
Dr. Robert Cialdini
<bullet> Please describe the work you have done recently on
individual behavior and energy conservation. What have you
learned about what influences the decisions individuals make
with respect to energy use?
<bullet> How can this research be used more effectively to
inform policy? Do you as a researcher reach out to policy-
makers or others in a position to influence policy? If not, how
would you propose that these connections be made? Can the
National Science Foundation play a role?
<bullet> What basic social psychology research questions
relevant to the energy challenge remain unanswered? Do social
scientists have all of the tools they need to answer these
questions and adequate resources to pursue promising research
directions? Are there as of yet undeveloped or underdeveloped
technologies or methodologies that would help advance this
research?
Dr. Jerry Ellig
<bullet> How predictive is a purely economic approach to
evaluating the impact of energy policy on individual and
communal behavior? What factors other than price signals need
to be considered when developing and applying economic models
to energy-related behaviors?
<bullet> To what extent are policies to influence individual
and community energy use being shaped by what has been learned
from research in the social sciences, including economics?
<bullet> What tools and methodologies are most appropriate for
evaluating the effectiveness of policies to incentivize
consumer behavior with respect to energy use? What kinds of
basic research questions underlie the development of such tools
and methodologies?
Mr. John ``Skip'' Laitner
<bullet> How predictive is a purely economic approach to
evaluating the impact of energy policy on individual and
communal behavior? What other factors need to be considered to
match economic theory to empirical data? To what extent are
such data even available? That is, to what extent are relevant
energy policies being evaluated for effectiveness?
<bullet> To what extent are policies to influence individual
and community energy use being shaped by what has been learned
from research in the social sciences, including economics? Are
you aware of particular sectors of industry or government that
make more of an effort to incorporate the results of such
research into the design and evaluation of policy?
<bullet> Please describe the purpose and scope of the first-
ever Behavior, Energy and Climate Change Conference being
organized by ACEEE. What do you hope to achieve through this
conference? How much interest have you seen from industry,
government officials, and others in a position to influence
policy?
Dr. Duane Wegener
<bullet> Please describe your involvement in the Purdue Energy
Center, and in particular the mission and goals of the Social,
Economic, and Political Aspects of Energy Use and Policy team
of the Center. How and to what degree does your team interact
and collaborate with the technology teams at the Center?
<bullet> How much support do you and your colleagues in this
area get from federal funding agencies? Have you sought any
support from or partnerships with public or private utilities
or other non-governmental entities?
<bullet> What has social science research revealed about
factors that influence how Americans form attitudes relevant to
energy use and policy? How can this research be used more
effectively to inform policy?
<bullet> What basic social psychology research questions
relevant to the energy challenge remain unanswered? Do social
scientists have all of the tools they need to answer these
questions and adequate resources to pursue promising research
directions? Are there as of yet undeveloped or underdeveloped
technologies or methodologies that would help advance this
research?
Chairman Baird. We will now call this hearing to order, and
I want to thank all our witnesses and guests here and my good
friend and colleague, Dr. Ehlers, for being here. I want to
also thank staff for their outstanding work in putting this
hearing together.
I am especially excited about today's hearing because it
sets the ground work for a number of hearings that I hope to
hold in this committee looking at how the social sciences can
help us address some of the most difficult challenges we face
in our country today. Energy, in my opinion, ranks among the
country's top three challenges, next to health and national
security. Solving our nation's energy challenges will depend on
a combination of technological innovations and behavior
changes. This committee and this Congress have held countless
hearings on the energy technologies of tomorrow. What we don't
talk often enough about is behavior and how changes in behavior
can start making a big dent in our energy challenge today.
Whereas we talk about the technologies of tomorrow, behavior
can help us make the changes today.
The panel sitting before us will give us insight into how
we might achieve this goal. One witness will tell us how a
simple change in a written message to hotel guests asking them
to reuse their towels could save 39 barrels of oil and 72,000
gallons of water in an average--in one hotel in one year. If
you multiply that by all the hotels in all the cities in this
country, that adds up to real energy savings, and that is just
one example of the kind of things we can learn from this
hearing today.
Imagine if every American decided to turn off their lights
when they left the room, shut down their computers at night, or
look for Energy Star labels the next time they shop for a major
appliance. The truth is U.S. households are responsible for
more than one-third of annual U.S. energy consumption. Of that
approximately 60 percent goes into powering our homes and the
rest into fueling our cars and SUVs, though not my SUV. To put
it in perspective, American homes consume 2.4 times as much
energy as homes built in Western Europe, 2.4 times as much. A
recent survey by the Alliance to Save Energy found that 92
percent of Americans agree that businesses, government, and
consumers have an equal responsibility to reduce energy use.
That seems fair, given that consumers use one-third of the
energy. Unfortunately, this attitude is not always translated
into action. The truth is that typical consumers don't have the
information to factor energy use to purchases and behaviors,
and the government and industry have fallen far short in
providing or communicating the needed information to the public
in a way that will result in behavior change, and I want to
underscore the latter point. Merely giving information but
without the cognizance of how the information will actually
lead to behavior change just doesn't do the job.
A recent National Academy of Sciences Report stated that
``a basic understanding of how information, incentives, and
various kinds of constraints and opportunities in combination
with values, beliefs, and social contexts shape consumer choice
in complex, real-world context would provide an essential
knowledge base for understanding and anticipating and
developing policies for effecting environmentally significant
consumer behavior.'' That again from the NAS. While the focus
of the particular NAS report was environmental policy, the
statement works equally well for policies related to energy use
which has not only an environmental impact but also economic
and frankly national security ramifications.
Our witnesses are working on different aspects of this
exact problem. Together they will tell a story beginning with
research into what influences individuals' energy-related
behavior and ending with the relevance of such research to the
development and evaluation of effective energy policies.
When the topic of social science comes up, there are always
vocal skeptics. We see them on the Floor of the House,
sometimes in this committee, and recently in the Conference
Report on the America Competes Act. Those who may acknowledge
the intellectual merit of the research but have trouble making
the connection to areas of national need and question why the
Federal Government should be supporting social science research
in the face of so many competing demands for those dollars I
hope will pay attention to this hearing today.
Today we will learn how the knowledge generated by research
in the social sciences is relevant to policy-making for energy.
But it is no less relevant to every other major issue facing
the country today including health care, education, national
security, crime, competitiveness, foreign policy, and the
environment. We won't have hearings on all of those topics, but
I guarantee we will have hearings on a few others and see how
behavioral and social sciences can help understand these
issues.
I want to thank all our witnesses for being here today. I
look forward very much to your testimony and our discussion,
and I would now recognize the Ranking Member, Dr. Ehlers, for
any comments he may wish to make.
[The prepared statement of Chairman Baird follows:]
Prepared Statement of Chairman Brian Baird
I now call to order this hearing on the contribution of the social
sciences to the energy challenge.
Energy, in my opinion, ranks among our country's top three
challenges next to health and national security. Solving our nation's
energy challenge will depend on a combination of technological
innovation and behavior change. This committee and this Congress have
held countless hearings on the energy technologies of tomorrow. What we
don't talk about is behavior--and how changes in behavior can start
making a big dent in our energy challenge today.
The panel sitting before us will give us insight into how we might
achieve this goal. One witness will tell you how a simple change in a
written message to hotel guests asking them to reuse their towels could
save 39 barrels of oil and 72,000 gallons of water in a single average-
size hotel in one year. If you multiply that by all of hotels in all
the cities in this country, that adds up to real energy savings. And
that's just because of a single, easy action on the part of hotel
guests.
Imagine if every American decided to turn off their lights when
they left a room, shut down their computers at night, or looked for an
EnergyStar label the next time they shopped for a major appliance? The
truth is that U.S. households are responsible for more than one-third
of annual U.S. energy consumption. Of that, approximately 60 percent
goes into powering our homes and the rest into fueling our cars and
SUVs. To put it in perspective, American homes consume 2.4 times as
much energy as homes built in Western Europe.
A recent survey by the Alliance to Save Energy found that ninety-
two percent of Americans agree that business, government, and consumers
have an equal responsibility to reduce energy use. That seems fair,
given that consumers use one-third of the energy. But, unfortunately,
this attitude has not translated into action.
I am not blaming the American consumer. The truth is that the
typical consumer doesn't have the information he or she needs to factor
energy use into purchases and behaviors, and the government and
industry have fallen far short in providing the needed information to
the public in a way that will result in behavior changes.
A recent National Academy of Sciences Report stated that ``A basic
understanding of how information, incentives, and various kinds of
constraints and opportunities, in combination with individuals' values,
beliefs, and social contexts, shape consumer choice in complex real-
world contexts would provide an essential knowledge base for
understanding, anticipating and developing policies for affecting
environmentally significant consumer behavior.''
While the focus of that particular NAS report was environmental
policy, such a statement works equally well for policies related to
energy use--which has not only an environmental impact, but also
economic and national security ramifications.
Today's witnesses are working on different aspects of that exact
problem. Together they will tell a story beginning with research into
what influences an individual's energy-related behavior and ending with
the relevance of such research to the development and evaluation of
effective energy policies.
When the topic of social sciences comes up, there are always vocal
skeptics--those who may acknowledge the intellectual merit of the
research, but have trouble making the connection to areas of national
need and question why the Federal Government should be supporting
social science research in the face of so many competing demands for
those dollars.
Today we will learn how the knowledge generated by research in the
social sciences is relevant to policy-making for energy. But it is no
less relevant to every other every major issue facing the country
today--including health, education, national security, crime,
competitiveness, foreign policy and the environment.
I thank all of our witnesses for being here today, and I look
forward to your testimony.
I now recognize the Ranking Member for any comments he may wish to
make.
Mr. Ehlers. I thank the Chairman, and I am pleased that
today's hearing will explore how energy-related policies are
being shaped by social science research, and also I might add,
by the behavior of people which is what we will be studying.
I understand that it is very challenging to determine why
people do what they do regarding energy given all the variables
in their lives. If Congress creates what looks like good policy
but which lacks an understanding of the primary drivers of
decision-making, our policies will still fail. We must account
for social factors when crafting energy policies, and I will
give a few examples in a minute.
Much of the basic research funded by the National Science
Foundation examines the fundamental mysteries behind brain
cognition and human behavior. Among other things, NSF studies
the causes and consequences of social and cultural norms. I
know many of my colleagues share my personal interest in
developing policies to draw more students into the science and
mathematics teaching profession. In that context, I believe
that it is integral that the social science research work, in
tandem with educational research to evaluate not only how to
best prepare teachers to teach but to understand what would
draw them and keep them in teaching. Perhaps if we continue
this series of hearings we could delve into what incentives
work best to encourage people to enter teaching professions, as
well as their willingness to stay in them. I might also add,
Mr. Chairman, we might also learn better ways of attracting
students to study these particular areas of science and
mathematics if we understood exactly what they and their
colleagues were thinking and also learn that this ensures their
future better than most other choices that they might make.
Returning to the topic at hand today, I am particularly
interested in what influences individuals to make energy-
efficiency decisions. We all assume that if people understood
their return on investment from energy efficiency measure, say
home improvements to save on winter heating bills, then they
would quickly make those changes. But I think our witnesses
will share that it is much more complicated. We are not always
as rational as we would like to believe. Furthermore, being
well-educated about energy efficiency does not necessarily
translate into action. Consumers are a fickle bunch, especially
in a society where individualism and personal freedoms are
highly cherished, and certain unranked desires on the part of
the consumer may guide the decision more than rational thought.
Mr. Chairman, I would just like to bring forward something
that happened to me. When my wife and I first got married and
first went into a house of our own instead of a furnished
apartment, we had to get a refrigerator. Not being an expert in
what refrigerators are good for, what features are nice and so
forth, I told my wife, you decide which features you want and
then we will go out together and decide on the best
refrigerator. She went shopping and came back, and had found
two refrigerators that met her needs which she liked very much.
I looked at them. One cost exactly twice as much as the other.
That would make it a simple choice. And this is in the days
before energy labels. But I proceeded to calculate the energy
consumption of the two refrigerators and discovered much to my
amazement that if I bought the more expensive one I would have
saved money within 10 years compared to buying the cheap one
because the cheap one used considerably more energy.
So we bought the more expensive one contrary to all
rational thought. It lasted 23 years, so we not only saved more
than the differential cost, but we actually saved enough to pay
for more than two refrigerators of the other type.
So those are the lessons that we should learn. We now have
the labels, but again I don't think the labels really make the
picture clearer. It would be much better if I could assign some
sort of age to the refrigerator and have a notice on the front
that says this one will cost you X amount over so many years,
and compared to other refrigerators that will last a shorter
time.
There are so many things that we can do about this that we
should be doing, and you have probably all heard my I-wish-
energy-were-purple story. You haven't? How did you escape? But
basically that if energy were purple, people's behavior would
change because they could see the results. In the winter they
could see purple oozing through the walls of their house if
they are not well-insulated or purple rivulets running down the
windows and doors, and so they would seal those up more
tightly. And driving down the highway, the Prius might be just
a little purple haze around the car but an SUV comes by, it is
just a purple cloud. If people could see energy, if it were
purple, they would change their behavior very quickly. The
question I think Mr. Chairman is how can we help them see the
consequences of their decisions, even though we can't make
energy purple? What way can we make this more obvious to them
so that it registers?
Well, I thank you, Mr. Chairman, for investigating this
important topic, and I look forward to hearing from our
witnesses.
[The prepared statement of Mr. Ehlers follows:]
Prepared Statement of Representative Vernon J. Ehlers
I am pleased that today's hearing will explore how energy-related
policies are being shaped by social science research. I understand that
it is very challenging to determine why people do what they do
regarding energy, given all the variables in their lives. If Congress
creates what looks like good policy, but which lacks an understanding
of the primary drivers of decision-making, our policies may still fail.
We must account for social factors when crafting energy policies.
Much of the basic research funded by the National Science
Foundation (NSF) examines the fundamental mysteries behind brain
cognition and human behavior. Among other things, NSF studies the
causes and consequences of social and cultural norms. I know many of my
colleagues share my personal interest in developing policies to draw
more students into the science and mathematics teaching profession. In
that context, I believe that it is integral that the social science
research work in tandem with educational research to evaluate not only
how to best prepare teachers to teach, but to understand what would
draw them and keep them in teaching. Perhaps if we continue this series
of hearings we could delve into what incentives work best to encourage
people to enter teaching professions as well as their willingness to
stay in them.
Returning to the topic at hand today, I am particularly interested
in what influences individuals to make energy efficiency decisions. We
all assume that if people understood their return on investment from
energy efficiency measures--say, home improvements to save on winter
heating bills--then they would quickly make those changes. But I think
our witnesses will share that it is much more complicated. We are not
always as rational as we'd like to believe. Furthermore, being well-
educated about energy efficiency does not necessarily translate into
action. Consumers are a fickle bunch, especially in a society where
individualism and personal freedoms are highly-cherished.
I thank the Chairman for investigating this important topic and I
look forward to hearing from our witnesses.
Chairman Baird. Dr. Ehlers, thank you. One of the things
that is most pleasant about serving in Congress is you can
serve with people like Dr. Ehlers as your Ranking Member
because the example he cited illustrates that he has applied
this in his life; and how many other Americans have the
technological know-how as a Ph.D. physicist to make those
calculations? And that is the kind of thing we are going to be
talking about today.
So without further ado, I just want to thank my good
friend, Jerry McNerney for joining us today, also a Ph.D.
engineer, mathematician, but applied it to wind and solar
energy for many years. So he knows whereof he speaks as well.
If there are other Members who wish to submit additional
opening statements, your statements will be added to the record
at this point. At this point I will introduce our witnesses.
Dr. Robert Cialdini is Regents' Professor of Psychology and
Marketing and W.P. Carey Distinguished Professor of Marketing
at Arizona State University. Dr. Duane Wegener is a Professor
of Psychological Sciences at Purdue University and an
Initiative Leader in the Social, Economic, and Policy Aspects
of Energy Use and Policy Division of the Purdue Energy Center.
Apparently the Purdue Energy gets the concept to have you as
part of the faculty. Mr. John ``Skip'' Laitner is Visiting
Fellow and Senior Economist for Technology Policy at the
American Council for an Energy Efficient Economy. Dr. Jerry
Ellig is a Senior Research Fellow at the Mercatus Center at
George Mason University and an Adjunct Professor at the George
Mason University School of Law. And Dr. Robert Bordley is a
Technical Fellow in the Vehicle Development Research Laboratory
at General Motors Corporation and an Adjunct Professor in the
Industrial and Operations Engineering Department at the
University of Michigan no less, with a nod to my dear friend.
As our witnesses know, each testimony is limited to five
minutes each after which the Members of the Committee will have
five minutes to ask questions.
We will start with Professor Cialdini. Thank you all for
being here.
STATEMENT OF DR. ROBERT B. CIALDINI, REGENTS' PROFESSOR OF
PSYCHOLOGY AND MARKETING, ARIZONA STATE UNIVERSITY
Dr. Cialdini. Chairman Baird, Ranking Member Ehlers, and
Members of the Subcommittee, it is my pleasure to be here today
to testify on the contribution of the social sciences to the
energy challenge. I believe that the social and behavioral
sciences do indeed hold tremendous potential to influence
individual and collective behaviors affecting energy
conservation providing that we understand how to craft the
message. Here is why. It is standard practice when advocating
for action among policy members, such as yourselves, to
emphasize the breadth of a problem; and that makes sense
because policy-makers are able to provide additional resources
or to enact regulations to address those abuses that they seem
to see as most prevalent.
However, a different and even opposite logic applies when
communicating to the public about a problem. To understand that
logic, consider the following incident. Not long ago, a
graduate student of mine visited the Petrified Forest National
Park in Arizona with his fiancee, a woman he described as the
single most honest person he had ever met. They quickly
encountered a park sign warning visitors against stealing
petrified wood. It said, our heritage is being vandalized by
the theft of 14 tons of wood every year. While still reading
the sign, he was shocked to hear his fiancee whisper, we better
get ours now.
What could have spurred this otherwise wholly law-abiding
young woman to want to become a thief and to deplete a national
treasure in the process? I believe it has to do with the
mistake that Park Service officials made in creating that sign.
They tried to alert visitors to the park of its theft problem
by telling them how many other visitors were thieves. In so
doing, they stimulated the behavior they had hoped to suppress
by making it appear commonplace, when in fact, less than three
percent of the park's millions of visitors have ever stolen a
piece of wood.
Although their claims may be both true and well-
intentioned, the creators of this and many other types of
public service campaigns have overlooked something basic about
the communication process. Within the lament, look at all the
people doing this undesirable thing, lurks the powerful and
undercutting message, look at all the people who are doing this
undesirable thing. And one of the fundamental lessons of human
psychology is that people follow the crowd. I am concerned that
this point is being missed in our attempts to communicate the
importance of environmental protection and energy conservation
within our communities.
Therefore, in our messaging, we need to be diligent in
making clear to the public that many unwelcomed actions with
regard to the environment are performed by only a small
minority of the population.
My colleagues and I at Arizona State University have done
research indicating that such an approach works. At the
Petrified Forest, for example, we erected a pair of signs in
different areas. The first urged visitors not to take wood and
depicted a scene showing three thieves in action. After passing
that sign, visitors became more than twice as likely to steal.
Our other sign also urged visitors not to take wood, but it
depicted a lone thief marginalizing that behavior instead of
normalizing it. Those individuals took only half as many pieces
of wood as before.
I believe that this lesson applies to other forms of
environmental offenses such as energy wastage. The secret is to
avoid validating the deviant actions of a small minority of
wrongdoers by making them appear the rule rather than the
exception. Otherwise we assure that a few rotten apples will
spoil the barrel.
The truth is, we are not a nation of polluters or
despoilers or energy pigs. We are not. Consequently, public
service messages should raise the profile of the majority that
does act pro-environmentally because as social science research
tells us, that spurs others to follow.
To test this idea, we examined resorts' conservation
choices made in upscale hotel rooms where guests often
encounter a sign asking them to reuse their towels. This is the
one at the hotel I stayed in a few blocks from here last night.
As anyone who travels frequently knows, this card may urge
action in various ways. Sometimes it requests compliance for
the sake of the environment. Sometimes it does so for the sake
of future generations, and sometimes it exhorts guests to
cooperate with the hotel in order to save resources. What the
card never says but is entitled to say because it is true is
that the majority of guests do recycle their towels when given
the opportunity. We suspected that this omission was costing
the hotels and the environment plenty. Indeed, when as part of
our research program we placed such a sign in certain guest
rooms in an upscale Phoenix hotel, it increased towel reuse by
34 percent over the traditionally employed messages.
I am going to close by raising two things that I think are
noteworthy about the results of our towel study. First, the
message that generated the most participation in the hotel's
program was the one that no hotel to our knowledge has ever
employed. Apparently, this highly effective appeal didn't
emerge from a history of trial and error as a hotel best
practice. Instead, it emerged from scientifically based
understanding of human psychology. This points out the need for
us to call on social scientific research in a systematic
fashion to help advance sound environmental policy. For
instance, in the case of hotel conservation, an average 150-
room hotel would save 72,000 gallons of water a year.
The second notable aspect of the hotel study was that the
significant increase in program participation was nearly
costless to the hotel, something that government needs to
recognize as well. We don't need to institute highly, costly
fixes, technological fixes, or tax incentives or regulations.
We can do it with the messaging process costlessly.
Thank you for the opportunity to provide the results of my
team's efforts to date. I will look forward to your questions
and comments.
[The prepared statement of Dr. Cialdini follows:]
Prepared Statement of Robert B. Cialdini
Abstract
Social norms, which refer to what most people do (descriptive
social norms) and what most people approve (injunctive social norms),
are remarkably powerful in directing human action. Social science
research has uncovered the most successful ways to incorporate norms
into messages designed to produce socially desirable conduct.
Studies in several environmental contexts (e.g., home energy
conservation, household recycling, hotel conservation efforts) show
that (1) energy users severely underestimate the role of social norms
in guiding their energy usage, (2) communications that employ social
norm-based appeals for pro-environmental behavior are superior to those
that employ traditional persuasive appeals, and (3) even though these
highly effective social norm-based appeals are nearly costless--
requiring no large technological fixes, tax incentives, or regulatory
changes--they are rarely (and sometimes mistakenly) delivered.
Chairman Baird, Ranking Member Ehlers, and Members of the
Subcommittee, it is my pleasure to be here today to testify on The
Contribution of the Social Sciences to the Energy Challenge. I believe
that the social and behavioral sciences do indeed hold tremendous
potential to influence individual and collective behaviors effecting
energy conservation, providing that we understand how to craft the
message.
Here's why. It is standard practice when advocating for action
among policy-makers (e.g., legislative or other governmental officials)
to emphasize the breadth of a problem. And, that makes sense because
policy-makers can be expected to provide additional resources or
regulations to address those abuses that appear to them most
widespread. However, a different--and even opposite--logic may apply
when communicating with the public about a problem. To understand that
logic, consider the following incident.
Not long ago, a graduate student of mine visited the Petrified
Forest National Park in Arizona with his fiancee--a woman he described
as the most honest person he'd ever known, someone who had never taken
a paper clip or rubber band without returning it. They quickly
encountered a park sign warning visitors against stealing petrified
wood, ``OUR HERITAGE IS BEING VANDALIZED BY THE THEFT OF 14 TONS OF
WOOD EVERY YEAR.'' While still reading the sign, he was shocked to hear
his fiancee whisper, ``We'd better get ours now.''
What could have spurred this wholly law-abiding young woman to want
to become a thief and to deplete a national treasure in the process? I
believe it has to do with a mistake that park officials made when
creating that sign. They tried to alert visitors to the park's theft
problem by telling them that many other visitors were thieves. In so
doing, they stimulated the behavior they had hoped to suppress by
making it appear commonplace--when, in fact, less than three percent of
the park's millions of visitors have ever taken a piece of wood.
Park officials are far from alone in this kind of error. Those
responsible for developing and enforcing public policy blunder into it
all the time. Teenage suicide prevention programs inform students of
the alarming number of adolescent suicides and, research shows, cause
participants to become more likely to see suicide as a possible
solution to their problems. When publicizing cases of school violence,
news outlets assemble accounts of incident after incident and, in the
process, spawn the next one. During prominently announced crack-downs
on the problem, government officials decry the frequency of tax evasion
and, as demonstrated by one follow-up study, increase tax cheating the
next year (Kahan, 1997). Although their claims may be both true and
well-intentioned, the creators of these information campaigns have
overlooked something basic about the communication process: Within the
lament ``Look at all the people who are doing this undesirable thing''
lurks the powerful and undercutting message ``Look at all the people
who are doing it.'' And, one of the fundamental lessons of human
psychology is that people follow the crowd. I am concerned that this
point is being missed in our attempts to communicate the importance of
environmental protection and energy conservation within our
communities.
I think there is a better way to proceed. We need be diligent in
making clear to the public that many unwelcome actions are performed by
a small minority of the population. For instance, let's consider the
case of littering. Few citizens litter with any frequency; most take
care to preserve the environment. The key to an enlightened public
policy approach to litter is to deliver the message that even one
abandoned newspaper can spread to despoil a pristine park or beach,
that even one cigarette butt flipped from a car can ignite a
devastating fire, that even one carelessly discarded plastic container
can endanger wildlife, and, most important, that even one piece of
litter can begin an accumulation that creates the mistaken--but
contagious--impression that we all litter. It's not even remotely true
that we are a nation of despoilers, and we shouldn't be misled into
believing that it is. Instead, armed with the knowledge that, as a
citizenry, we do care about our environment, we should focus on
marginalizing the few who don't care.
Would such an approach work in other environmental arenas? My
colleagues and I at Arizona State University have done research
indicating that it well might. At the Petrified Forest, we erected a
pair of signs in different areas. The first urged visitors not to take
wood and depicted a scene showing three thieves in action. After
passing that sign, visitors became over twice as likely to steal than
before! Our other sign also urged visitors not to take wood, but it
depicted a lone thief. Visitors who passed it became nearly half as
likely to steal than before (Cialdini, 2003). I believe that this
lesson applies to other forms of environmental offenses such as energy
wastage. The secret is to avoid validating the deviant actions of a
small minority of wrongdoers by making them appear the rule rather than
the exception. Otherwise, we assure that a few rotten apples will spoil
the barrel.
In addition, we should be sure to raise the profile of the majority
that does act pro-environmentally, because that spurs others to follow
suit. For instance, with our students, my fellow environmental
researcher, Wes Schultz of California State University-San Marcos, and
I obtained support from the William and Flora Hewlett Foundation to
study how descriptive social norms (the perception of what most people
do in a situation) can influence energy conservation decisions. Our
survey of nearly 2,500 Californians showed that those who thought their
neighbors were conserving were more likely to conserve themselves. But,
at the same time, almost all of the survey respondents underestimated
the conservation efforts of their neighbors. In a follow-up study, we
placed door hangers on the doors of San Diego-area residents once a
week for a month. The door hangers carried one of four messages,
informing residents that (1) they could save money by conserving
energy, or (2) they could save the Earth's resources by conserving
energy, or (3) they could be socially responsible citizens by
conserving energy, or (4) the majority of their neighbors tried
regularly to conserve energy--information we had learned from a prior
survey. We also include a control group of residents in the study whose
door hanger simply encouraged energy conservation but provided no
rationale. Even though our prior survey indicated that residents felt
that they would be least influenced by information regarding their
neighbors' energy usage, this was the only type of door hanger
information that led to significantly decreased energy consumption,
almost two kWh/day (Nolan, Schultz, Cialdini, Goldstein, &
Griskevicius, 2007). This suggests a clear way to increase conservation
activity--by trumpeting the true levels of conservation that are going
unrecognized.
To investigate this idea, we examined resource conservation choices
in upscale hotel rooms, where guests often encounter a card asking them
to reuse their towels. As anyone who travels frequently knows, this
card may urge the action in various ways. Sometimes it requests
compliance for the sake of the environment; sometimes it does so for
the sake of future generations; and sometimes it exhorts guests to
cooperate with the hotel in order to save resources. What the card
never says, however, is that (according to data from the Project Planet
Corporation that manufactures the cards) the majority of guests do
reuse their towels when given the opportunity. We suspected that this
omission was costing the hotels--and the environment--plenty.
Here's how we tested our suspicion. With the collaboration of the
management of an upscale hotel in the Phoenix area, we put one of four
different cards in its guest rooms. One of the cards stated ``HELP SAVE
THE ENVIRONMENT,'' which was followed by information stressing respect
for nature. A different card stated ``HELP SAVE RESOURCES FOR FUTURE
GENERATIONS,'' which was followed by information stressing the
importance of saving energy for the future. A third type of card stated
``PARTNER WITH US TO HELP SAVE THE ENVIRONMENT,'' which was followed by
information urging guests to cooperate with the hotel in preserving the
environment. A final type of card stated ``JOIN YOUR FELLOW CITIZENS IN
HELPING TO SAVE THE ENVIRONMENT,'' which was followed by information
that the majority of hotel guests do reuse their towels when asked. The
outcome? Compared to the first three messages, the final (social norm)
message increased towel reuse by an average of 34 percent (Goldstein,
Cialdini, & Griskevicius, 2007).
Two things are noteworthy about the results of the hotel study.
First, the message that generated the most participation in the hotel's
towel recycling program was the one that no hotel (to our knowledge)
has ever used. Apparently, this simple but effective appeal didn't
emerge from a history of trial and error to become a hotel ``best
practice.'' Instead, it emerged from a scientifically-based
understanding of human psychology. This points out the need to call on
social scientific research in a systematic fashion to help advance
sound environmental policy. For instance, in case of hotel conservation
programs, the average 150-room hotel would save 72,000 gallons of
water, 39 barrels of oil, and would obviate the release 480 gallons of
detergent into the environment in the course of a year if guests
complied with the requests.
The second notable aspect of the hotel study was that the
significant increase in program participation was nearly costless. In
most cases, for an organization to boost effectiveness by 34 percent,
some expensive steps have to be taken; typically, organizational
structure, focus, or personnel must be changed. In this instance,
however, none of that was necessary. Rather, what was required was a
presentation of the facts about the preferred behavior of the majority.
Conclusion
In sum, when communicating with the public, it is important to
avoid trying to reduce the incidence of a damaging problem by
describing it as regrettably frequent. Such an approach, while
understandable, runs counter to the findings of social science
regarding the contagiousness of social behavior, even socially harmful
behavior. Moreover, often, the problem under consideration is not
widespread at all. It only comes to seem that way by virtue of a vivid
and impassioned presentation of its dangers. Instead, it would be
better to honestly inform our audience of the environmental peril
resulting from even a small amount of the undesirable conduct.
Furthermore, when most people are behaving responsibly toward the
environment, we'd be less than responsible ourselves if we failed to
publicize that fact, as the social science evidence is plain that the
information will serve both to validate and stimulate the desired
action.
References
Cialdini, R.B. (2003). Crafting normative messages to protect the
environment. Current Directions in Psychological Science, 12,
105-109.
Goldstein, N., Cialdini, R.B., & Griskevicius, V. (2006). A room with a
viewpoint: Using norm-based appeals to motivate conservation
behaviors in a hotel setting. Manuscript currently under
review.
Kahan, D. (1997). Social influence, social meaning, and deterrence.
Virginia Law Review, 83, 349-395.
Nolan, J.M.. Schultz, P.W., Cialdini, R.B., Goldstein, N.J., &
Griskevicius, V. (2007). Normative influence is under-detected.
Manuscript currently under review.
Biography of Robert B. Cialdini
Robert B. Cialdini is Regents' Professor of Psychology and
Marketing at Arizona State University, where he has also been named W.
P. Carey Distinguished Professor of Marketing. He has taught at
Stanford University and Harvard's Kennedy School of Government. He has
been elected President of the Society of Personality and Social
Psychology. He is the recipient of the Distinguished Scientific
Achievement Award of the Society for Consumer Psychology, the Donald T.
Campbell Award for Distinguished Contributions to Social Psychology,
and the (inaugural) Peitho Award for Distinguished Contributions to the
Science of Social Influence.
Professor Cialdini's book Influence: Science and Practice, which
was the result of a three-year program of study into the reasons that
people comply with requests in everyday settings, has sold over a
million copies while appearing in numerous editions and twenty-two
languages.
Chairman Baird. My guess is that card doesn't use your
effective message, right?
Dr. Cialdini. It doesn't. It says please do this for the
sake of the environment, and then it adds insult to injury by
saying, don't forget to recycle every year. Americans waste
four trillion documents, enough to paper the Grand Canyon 300
times. So they do the opposite of what our research suggests.
Chairman Baird. Dr. Wegener.
STATEMENT OF DR. DUANE T. WEGENER, PROFESSOR OF PSYCHOLOGICAL
SCIENCES; INITIATIVE LEADER FOR SOCIAL, ECONOMIC, AND POLITICAL
ASPECTS OF ENERGY USE AND POLICY, ENERGY CENTER AT DISCOVERY
PARK, PURDUE UNIVERSITY
Dr. Wegener. Chairman Baird, Ranking Member Ehlers, and
Members of the Subcommittee, thank you for the opportunity to
testify.
I am here today in part because of the necessary transition
from fossil fuels to new, sustainable energy sources will rely
on more than development of new energy technologies. A
successful transition to new energy sources will be determined
to a large extent by changing in the energy use behaviors of
energy consumers.
In my home discipline of social psychology, factors such as
social norms, values, and attitudes have been identified as
important determinants of behavior. However, these social
factors are not always equally important. My research focuses
on attitudes, persuasion, and the consequences of the resulting
attitudes in terms of the persistence of the attitude over
time, its ability to resist future attempts at change, and its
ability to influence future thinking and behavior.
As the Charter for this hearing noted, there are
indications that people hold favorable attitudes toward energy-
relevant actions such as conservation. Yet, in too many
circumstances, these attitudes do not seem to be having the
desired effects on behavior. Why is it that these attitudes are
not getting the job done and what do we know about attitudes
and persuasion in help making these attitudes more influential?
The social psychology literature on attitudes has
identified a number of determinants of when attitudes influence
behavior and when they do not. Let me focus on one area of this
research, the work on attitude strength. The concept of
attitude strength came from the acknowledgment that not all
attitudes are equally capable of influencing behavior. Many
specific properties of the attitudes have been identified that
make them relatively strong. In the persuasion experiments
conducted in my lab, we focus on the factors that influence how
much people think about the persuasive message. In some
circumstances, people engage the message and think carefully
about what it has to say. In others, they either lack the
motivation or the ability to think carefully about the
information in the message. In both types of situations, people
can be persuaded but the changes in attitudes created by
thinking carefully about the message creates attitudes that
have this property of strength.
As one example, in a recent set of studies a colleague of
mine, Kevin Blankenship, and I took topics that people were not
naturally motivated to think carefully about, including the
topic of building nuclear power plants in Canada. And we asked
them to think about whether that message related to values that
we had previously identified as either quite important or
relatively unimportant to our participants. When considering
whether the message was related to these important values,
message recipients thought much more thoroughly about the
information using a number of different measures of amount of
thinking. And just as importantly, the attitudes formed through
thinking were then more capable of resisting a later message
that opposed people's attitudes. In the nuclear power study,
the later message opposed the building of nuclear power plants
where the initial message had supported the building of those
plants.
These thoughtful attitudes have also been shown in other
research to be more likely than to guide later behaviors, even
when the non-thoughtful attitudes were in fact just as
favorable as those thoughtful attitudes.
So if people are favorable toward energy conservation, for
example, but their opinions are not well-thought out, then
these attitudes are unlikely to translate into energy
conservation behaviors.
Theory and research and attitudes has also identified
additional factors that make attitudes stronger. For example,
attitudes are stronger when people hold them with confidence,
and the attitude is also strong if the person views the
proposal like the building of nuclear power plants as mostly
good or mostly bad, rather than as having a more equal mixture
of good and bad features which we refer to as ambivalence.
In each of these cases, the attitudes with these properties
are more likely to have the consequences that I mentioned
earlier, persistence, resistance, and impact on behavior. There
is certainly much more to learn about persuasion and about
attitude strength including, for example, which of the
strength-related features is necessary or sufficient to produce
the particular consequences, especially here to produce the
desired attitude-consistent behaviors.
Although I spent most of my time this morning speaking as a
researcher who conducts experiments on attitude change, I also
work within a multi-disciplinary group of energy researchers in
the Energy Center at Purdue University. The model in that
Center is to build connections among social scientists from
different disciplines, psychology, economics, political
science, consumer behavior, science education, and others, and
also to connect those researchers with the technological
development teams and bioenergy hydrogen, et cetera. This
integration of social scientists, natural scientists, and
engineers is valuable in moving the issues of economic
viability and technology adoption to the forefront of
technology development. We believe that addressing the social
obstacles that a new technology is likely to face will help to
build new technologies that find viable markets more quickly
and are therefore more successful. Both the basic research in
social science and the integration of this science with
technology development will be important in smoothing the
behavioral pathways to a new energy economy. Unfortunately,
both basic science and social psychology and policy and
behavioral research on energy per se remains under-funded at
the federal level.
To conclude, the best new technology will not help us to
address the energy challenge unless the public adopts them.
Therefore, the coming energy transition from fossil fuels to
new sustainable sources of energy will consist in large part of
behavioral changes will benefit from greater research to
understand these behavioral changes and to integrate this work
with technology development.
Thank you very much.
[The prepared statement of Dr. Wegener follows:]
Prepared Statement of Duane T. Wegener
Abstract
The energy challenge is characterized by (a) a great need for
development of new technology, and (b) a need for unprecedented changes
in energy-related behavior. These behavior changes must occur at many
levels, including investors, energy producers (including those in the
supply chain), and individual consumers. At Purdue University, I
address behavior change through basic research on attitudes,
persuasion, and behavior. I also help to lead an initiative in the
Purdue Energy Center that focuses on social, economic, and political/
policy factors that will influence the behavioral pathways to a new
energy economy. By interacting directly with technology development
teams, my colleagues and I seek to identify and influence the barriers
that new energy technologies will face. By integrating social science
with technology development, we believe that new technologies can come
on-line faster and more smoothly. The challenge for completing this
work is that current federal funding provides strong support for
technology pathways but provides insufficient support for research
addressing the behavioral pathways. In the various sections of my
written testimony, I describe my activities in the Purdue Energy
Center, the available funding for our research, the existing research
on attitude formation and change (including examples of recent research
from my lab on attitudes toward nuclear power), and examples of
relevant research questions that remain unanswered.
Chairman Baird, Ranking Member Ehlers, and Members of the
Subcommittee, thank you for the opportunity to testify on the
Contribution of the Social Sciences to the Energy Challenge. I believe
that the social sciences will play a crucial role in understanding and
facilitating the behavioral pathways to a new, sustainable energy
economy.
I was asked to address four sets of questions. They are listed,
along with my written testimony, in the following sections. In order to
facilitate the identification of responses to specific questions, I
have included headings to correspond with each question in the question
set.
1. Please describe your involvement in the Purdue Energy Center, and
in particular the mission and goals of the Social, Economic, and
Political Aspects of Energy Use and Policy team of the Center. How and
to what degree does your team interact and collaborate with the
technology teams at the Center?
Involvement in the Center
I serve as one of three Initiative Leaders for the area of Social,
Economic, and Political Aspects of Energy Use and Policy (SEPAE). The
other two initiative leaders are Wallace Tyner (a Professor of
Agricultural Economics) and Glenn Parker (a Distinguished Professor of
Political Science). Included in the initiative leader role, we each
also serve as a member of the Executive Board of the Energy Center (a
decision-making body that meets quarterly). Our work as initiative
leaders is multi-faceted. Because a primary goal for the Energy Center
in general is to build new transdisciplinary research teams, we have
been working to inform one another about the research we do in each of
our respective disciplines. We have also been working to build
connections to the various technology-development initiatives within
the Center. Finally, as initiative leaders, we work to organize
responses to calls for research proposals. Much of the early effort has
been aimed at federal research dollars, but we have also attempted to
make connections with State government, utilities that operate in the
state, and, to a lesser degree, with private foundations (more on this
in response to Question #2 from the Committee).
The Mission of the SEPAE Group within the Energy Center
The mission of the SEPAE group is directly related to the topic of
today's hearing. We seek to extend research and theory from the social
sciences to the topics of energy technology, energy use, and policy. In
other words, SEPAE faculty work to address drivers and obstacles faced
by new energy technologies (especially those studied within the other
Energy Center research initiatives). The purpose of the SEPAE research
is to increase the ultimate effectiveness of technology development by
performing simultaneous analyses of economics, policy alternatives,
public/political technology acceptance, and energy-related decision-
making. Each of these factors should feed into energy-related
behaviors, including investment by companies or individuals, use of new
energy-related products, and support for policy-makers who champion
particular energy policies.
We believe that these efforts are crucial in managing the necessary
transition away from previous technologies that are ultimately
unsustainable (and, in many forms, polluting) and to the use of new,
sustainable energy technologies. The reality is that any new energy
technology is likely to start with a variety of competitive
disadvantages. Potential long-term sources of clean energy, such as the
promised hydrogen economy, will require new infrastructure for storage,
transportation, and fuel delivery. Even energy sources that potentially
piggyback on existing infrastructure (such as generation of liquid
fuels via clean coal technologies or biomass) require new processing
facilities and pose new logistical challenges as they seek to compete
economically with currently dominant energy sources (i.e., fossil
fuels).
Every step in the process will depend on a combination of social,
economic, and political forces. Uninformed (and perhaps even informed)
citizens may continue to favor cheap and familiar sources of energy.
Suppliers of that energy may also attempt to forestall widespread
adoption of alternative energy sources. Yet, citizens concerned about
issues such as security, environmental preservation, and support for
local economic development may be willing to pay the premium necessary
to fully develop new energy sources that can ultimately compete with
fossil fuels. For many new energy technologies, new regulatory statutes
and bodies will be necessary, and policies governing the economic risks
for investors will have direct effects on whether private investment
occurs and to what extent. As the next generation of energy sources
comes online, customer acceptance may also determine the extent to
which policy-makers and industry support the widespread development,
and ultimately the economic feasibility, of the new technologies.
Unfortunately, in many cases, simply waiting for the development of
a commercially viable product may be too late. For example, some
promising technologies are being developed for use of plants that are
genetically modified to increase their efficiency (and environmental
friendliness) in production of biofuels. However, no regulatory system
exists for the commercial use of those plants for production of
biofuel. If the technology progresses to the point of becoming
economically viable, but no regulatory process is put in place, it
could create years worth of delays before the new plants can be
productively used in the marketplace. Of course, this anticipated delay
and the associated uncertainty could deter private investment in the
technology. And the building of a regulatory system is likely to depend
on both public and political perceptions of the new technology (e.g.,
in terms of its impact on the surrounding community and on the
environment more generally).
Research addressing the social, economic, and political factors
that influence development and adoption of new technologies will help
the technology researcher to create technologies that face fewer
obstacles. For example, public or political opposition to use of a
genetically-modified plant in biofuel production might be based
primarily in the concern that the modified gene will spread to native
species (see Goy & Duesing, 1996; Meilan, 2004). If so, then creation
of sterile versions of the plant might face less public and political
opposition. In this type of situation, therefore, attention to social
and political factors might identify issues that can be addressed in
advance by technology developers, and the new technology can avoid an
obstacle that would threaten the economic viability of the technology.
In other settings, identification of obstacles or drivers for
adoption might identify effective means of educating or persuading the
public or policy-makers about the benefits of the new technology. This
could ease the creation of regulatory systems friendly to the new
technology or could ease the zoning and approval of new plants using
the technology. Therefore, in a variety of situations, the economic
viability of the new technology might be enhanced by early attention to
social, economic, and political/policy matters.
Interaction with Technology Teams
The integration of SEPAE topics with the technology development
teams differentiates Purdue University's Energy Center from many others
across the country. Ideally, the SEPAE topics will eventually be
pursued across each of the other research areas within the center
(including initiatives in Clean Coal, Solar, Bio-, Wind,
Electrochemical, Power Electronics, Hydrogen, and Nuclear areas of
energy technology).
These integrative efforts have yielded a number of successes in the
brief time since the Energy Center's inception. For example, a team of
researchers investigating production of biofuels from trees recently
received a $1.4 million grant from the Feedstock Genomics program at
the Department of Energy (DOE Grant # DE-FG02-06ER64301; through the
Office of Science, Office of Biological and Environmental Research). In
the grant proposal, the Principal Investigators noted the connections
between SEPAE research in the Center and their research on biofuel
production, and these connections were noted as a strong feature of the
proposal in panel reviews of the biofuel grant. The SEPAE activities
were not funded in the DOE grant, but other recent efforts are
beginning to produce funding for the SEPAE activities.
Recently, a team of SEPAE researchers submitted a grant application
to the National Science Foundation program on Human Social Dynamics,
and this grant has been recommended for funding (for $750,000 over
three years, beginning in January 2008). The grant addresses social,
economic, and political aspects of U.S. Ethanol Policy. In particular,
the research supported by the grant will examine (a) the economics of
the seven most likely ethanol policy options, (b) public and political
perceptions of the ethanol policies (including comparisons between
public perceptions and those of policy-makers in states that ban use of
genetically-modified plants for biofuel production or not), and (c) the
influences of attitudes and values on individuals' energy-related
decision-making.
I am the Principal Investigator for that grant, along with Wallace
Tyner (in Agricultural Economics) and Leigh Raymond (in Political
Science) as Co-Investigators. In addition, however, the research team
includes consultants in Psychological Sciences (Professor Janice
Kelly), Biochemistry (Distinguished Professor Clinton Chapple),
Forestry and Natural Resources (Associate Professor Richard Meilan),
and Economics (Professor Timothy Cason). Therefore, the research team
for this project includes researchers from across the areas of SEPAE,
as well as Principal Investigators (Chapple and Meilan) from the DOE
grant on biofuel production mentioned earlier.
As these two grants would imply, our interactions thus far have
been closest between SEPAE and the BioEnergy initiative. We have also
made some initial connections with the Hydrogen and Clean Coal
initiatives, though not to the same extent. Other than these three
areas, most of the interaction among areas of the Center has taken
place in the Executive Board meetings, where each initiative leader
describes the current efforts for their initiative. It is clear from
our initial efforts that the creation of transdiciplinary teams
involves a good deal of ``start up'' costs. It takes time and effort,
not only in developing potential research questions of common interest,
but then also attempting to find sources of funding that would be
interested in supporting research on those questions.
Researchers in the energy technology areas are naturally focused on
the work required to develop those technologies, and only some express
interest in integration of SEPAE topics with technology development. In
some cases, the researchers believe that public acceptance of the new
technology must simply consist of making them aware of the benefits of
the technology (whether the benefits be related to cost, environmental
preservation, or security). However, as many of the committee members
may routinely experience in their role as policy-makers, public
acceptance is often influenced by a variety of factors that may, on the
face of it, appear less than rational. In the energy domain, many new
technologies that appear to have advantages over older technologies
(e.g., in decreased pollution), are nonetheless opposed by nearby
residents (the prevalent ``not-in-my-back-yard'' problem). This is
certainly true for nuclear energy (Rankin, Nealy, & Melber, 1984; Rosa
& Dunlap, 1994). A local example in Southern Indiana provided a similar
situation when community members opposed a new coal-based power plant
using updated technology capable of cutting pollution to a small
fraction of that emitted by the coal-based plant to be replaced
(despite the fact that the new plant would create more than ten times
the amount of energy of the old plant).
Therefore, it seems crucial to understand the human aspects of
energy-related behavior and to take those aspects into account in the
technology development process. In order to do this, it may require
directed investment on the part of funding agencies or energy centers
to build and maintain these transdisciplinary collaborations.
2. How much support do you and your colleagues in this area get from
federal funding agencies? Have you sought any support from or
partnerships with public or private utilities or other non-governmental
entities?
Support from Federal Funding Agencies
A number of SEPAE faculty have been successful in recent
competitions for federal research support. However, this success comes
despite a relative lack of available funds for SEPAE research.
There are at least a couple of standpoints from which to answer
this question. One is from the point of view of energy researchers per
se.
For Energy Research
As noted earlier, the SEPAE group has been successful of late in
obtaining funding from the Human Social Dynamics (HSD) program of the
National Science Foundation (NSF). However, this program is, by no
means, focused on problems related to energy per se. Therefore, it is
not a surprise that relatively little of the funding through this
program supports energy-related research. Over the four years of the
HSD program, a number of the awards support projects focused on
influences of climate change, but very few deal directly with energy or
new energy technologies.
In addition to the NSF funding, SEPAE member Wallace Tyner was also
successful in a recent Department of Energy (DOE) competition for
research proposals in Ethical, Legal, and Societal Implications (ELSI)
of Research on Alternative Bioenergy Technologies, Synthetic Genomics,
or Nonotechnologies. This grant, set to receive $660,000 over three
years, seeks to ``develop realistic assessments of the economic and
environmental impacts of regional and global policies designed to
stimulate bioenergy production and use.'' Professor Tyner, who led the
proposal, was joined by Tom Hertel, Distinguished Professor of
Agricultural Economics, and Quinlai Zhuang, Professor of Earth and
Atmospheric Sciences and Agronomy. This was a new program for the DOE,
and it funded proposals for a total of $1 million during fiscal year
2007 (approximately five total grants of the size of the Tyner, Hertel,
& Zhuang proposal). Therefore, unless this program or something like it
is expanded quite a lot, the federal funding aimed specifically at
social, economic, and political aspects of energy use or policy seems
quite limited.
It is also true that none of the current National Energy
Laboratories involve the study of social, economic, or political/policy
dimensions of energy technology. Thus, if Congress sees potential
benefits in specifically funding energy-related research addressing
social, economic, and political/policy factors, this may require
changes in the structure or priorities of federal funding sources. One
model would be to set up a national center (a national lab) for the
social-scientific study of energy. If benefits are seen in the direct
integration of this research with technology development, it would be
important for this center to be closely associated with either a
technology-oriented national lab or energy center. Yet another model
would be to provide finding for competitions within existing funding
structures (e.g., through the DOE or even NSF) that focus on the
social-scientific influences on energy use, policy, and technology.
Again, if benefits are seen in integration of this research with
technology development, specific calls could be made for
transdisciplinary work on the topic (within either the current DOE
focus on technology development or NSF interdisciplinary programs).
For Basic Science
A second standpoint for answering this question comes from my work
as a basic (laboratory-based) researcher on processes involved in
attitude formation and change. As discussed in more detail in response
to Question #3, basic research on attitudes and attitude change seeks
to identify psychological processes that generalize across many
specific content domains (including, but by no means limited to energy-
related topics). Because attitudes have potent influences on behavior,
attitude change provides one of the best mechanisms for influencing
energy-use behavior (and behaviors in a variety of other domains, such
as health, civic engagement, environmental preservation, etc.).
In energy and other domains, it would make little sense to fund
research on applications (such as chemical processes involved in making
liquid fuels from coal) without continuing to fund basic research (such
as the actions of a catalyst on reactions that occur with controlled
concentrations of certain chemicals). Yet, whether intended or not,
this is what has happened at the National Institutes of Health (NIH)
for research on attitudes and attitude change (and for Social
Psychology generally--the discipline in which most psychological
research on attitudes occurs).
Indeed, over the years, the National Institute of Mental Health
(NIMH) has been the single largest funding source for basic research in
social psychology (and attitude change). This continued to be true
until a few years ago. Since that time, NIMH funding for social
psychological research has virtually dried up, because NIMH has decided
that basic research in all areas of social psychology (not only
attitudes and attitude change) is not sufficiently related to severe
mental illnesses. Although NIH continues to fund applied research into
specific conditions or diseases (e.g., cancer, drug abuse), there is
concern from the scientific community that funding for basic (cross-
content) research on the relevant behavioral processes is insufficient.
This has occurred despite the fact that Congress has repeatedly
requested that NIH increase its support for basic behavioral research.
The reader might wonder how this decrease in funding is related to
research on energy per se. When basic research is not funded, this
reduces advances in theory and research relevant to many applied
domains. For example, as I describe in more detail later, my colleagues
and I recently conducted research on implications of attitudinal
ambivalence for attitude change. In that research, we found the same
pattern of results for a health-related topic (proposed taxing of junk
food) and an energy-related topic (proposed building of nuclear power
plants). Thus, decreases in funding for basic research decreases
knowledge that can benefit many (seemingly unrelated) areas of applied
interest.
It is true that NSF continues to fund basic research in social
psychology generally (and attitude change in particular).
Unfortunately, because the NSF budget has not increased, overall
support for basic research on attitudes and attitude change (and for
research on social and cognitive processes in general) has markedly
decreased and remains severely under-funded.
Support from Non-Governmental Entities
In the first two years of the Energy Center, SEPAE efforts at
seeking funding for our research have focused on federal funding
sources (though, as discussed earlier, relatively few federal dollars
are specifically aimed at the types of research we conduct). One reason
for this is undoubtedly that most of the researchers gathering as
members of SEPAE have had their previous research supported primarily
by federal dollars.
We have made some attempts, and are continuing to do so, in other
areas, however. Our few contacts with energy utilities thus far have
been channeled back to regulatory decisions pending with the Indiana
Utility Regulatory Commission. One regulatory settlement occurred
recently in the area of natural gas to support analysis of a demand-
side (energy conservation) program. Unfortunately, the structure and
funding included in that settlement would not support the kinds of
research that we conduct in the SEPAE group. Although we are certainly
open to direct work with utilities, we have not identified other
opportunities for funding our research in this way.
In other areas of the Center, there are close ties with Indiana
State Government (especially in supporting research for how to use
Indiana coal in environmentally responsible ways). However, we have not
yet identified a State government funding mechanism for SEPAE research.
Just in the past couple of weeks, we have also had SEPAE members
(Tyner and Wegener) meeting with a broad group of Purdue University
researchers to discuss a proposal to a private foundation. This
foundation is consulting with various Universities on possible projects
that address agriculture and the environment (a Purdue proposal would
likely address the environmental impact of biofuels, with a heavy
emphasis on changing land use behaviors). These foundation connections
are new for us and may take some time to cultivate. The exploration of
new funding sources is certainly one type of ``start up'' cost involved
in the building of transdisciplinary research teams to address
important societal problems.
3. What has social science research revealed about factors that
influence how Americans form attitudes relevant to energy use and
policy? How can this research be used more effectively to inform
policy?
Influencing Attitudes
I have to answer this question from the standpoint of a social
psychologist, without claiming to be an expert in all areas of social
science relevant to attitude formation and change. One interesting
aspect of the social psychological literature on attitudes and
persuasion is that it is designed to be basic science, identifying
general psychological properties that are applicable to attitudes about
different people, objects, or policies. Therefore, in most social
psychological research on attitude change, the same effects and
processes are shown to occur for two or more topics. In many cases,
these topics are not directly energy-related, but there is little
reason to expect that the processes identified would not also occur
when the attitudes are about energy use or energy policy.
Research on attitudes and attitude change has been a core part of
social psychology since the 1930s. G. W. Allport (1935) first called
attitude social psychology's most indispensable construct, but this is
arguably still true today. This is because attitudes (one's overall
evaluations of people, objects, or issues) are pervasive and functional
(see Maio & Olson, 2000b; Pratkanis, Breckler, & Greenwald, 1989). For
example, attitudes predict behavior when controlling for other
psychological constructs, such as values (Homer & Kahle, 1988) and
subjective norms (Ajzen & Fishbein, 1970, 2005). Indeed, it is partly
because attitudes are capable of influencing behaviors that researchers
became interested in techniques used to change attitudes.
It is beyond the scope of the current testimony to provide a
comprehensive review of the last 80 years of research and theory in
this area. Therefore, I will provide only a brief summary to provide
examples of common variables and processes that have been studied. The
reader can see Petty and Cacioppo (1981/1996) for an accessible
(undergraduate level) overview of attitudes and persuasion. Petty and
Wegener (1998) and Wegener and Carlston (2005) provide more recent
reviews.
I divide my current summary into sections on classes of variables
studied, common processes in message-based persuasion, and examples of
research from my lab that has addressed attitudes toward nuclear power.
Classes of Variables that Influence Attitudes
Factors involved in message-based attitude change (of the type
involved in mass communications, such as advertising) have included
characteristics of the source of the message, characteristics of the
message itself, characteristics of the recipient of the message, and
characteristics of the context in which people receive the message (see
Petty & Wegener, 1998). Prevalent source characteristics include the
credibility (expertise and trustworthiness), attractiveness
(likability), and power of the source. Prevalent message
characteristics include the position of the message (i.e., relatively
agreeable or disagreeable to the message recipient) and the quality and
quantity of arguments used in the message. Other message features
include framing of the message (e.g., stating the message in positive
terms, such as ``if you stop smoking, you'll live longer,'' or negative
terms, such as ``if you smoke, you will die sooner'') or the order in
which opposing messages are encountered. Recipient characteristics
include characteristics of the attitudes message recipients already
hold, demographic characteristics, and personality of the person
receiving the message. Finally, context variables include the level of
distraction created by competing activities, the modality (e.g.,
written, audio) through which the message is received, and the
uplifting or depressing setting surrounding the persuasive message
(which could also be considered as creating differences in the mood
state of message recipients).
Persuasion Processes
In addition to the many individual variables that have been
studied, a variety of psychological processes have been identified to
determine when and how the variables influence attitudes. Many of the
persuasion processes can be organized using the Elaboration Likelihood
Model (ELM; Petty & Cacioppo, 1986b; Petty & Wegener, 1999). The ELM
organizes persuasion processes according to how much people are
thinking about (elaborating on) the available information about the
person, object, or topic of interest.
High-elaboration (thoughtful) processes. The message recipient is
likely to think more about available information when highly motivated
(e.g., because the message topic is important or personally relevant to
the recipient) and able to do so (e.g., because environmental
distractions are minimal; see Petty & Wegener, 1998). When elaboration
(thinking) is high, message recipients are likely to generate many
evaluative thoughts about the information, and these thoughts are
responsible for influences of the available information on attitudes
(see Wegener, Downing, Krosnick, & Petty, 1995). In these types of
situations, argument quality is likely to be an important determinant
of attitude change. If arguments are compelling, attitudes become more
favorable, but if arguments are weak, then little attitude change
occurs. In contrast, if motivation or ability to think is lacking,
argument quality has little effect on attitudes (e.g., Petty, Cacioppo,
& Goldman, 1981).
When thinking carefully about available information, message
recipients are also likely to actively assess the evaluative
implications of available information by ``calculating'' the likelihood
and desirability of presented information. For example, a statement in
a message might say that a particular political candidate favors higher
subsidies for producers of ethanol that use cellulosic feedstocks
(e.g., grasses or trees) than for producers that use corn. When
thinking carefully about the information, message recipients assess the
likelihood that the candidate strongly favors the policy and their own
perceived desirability of the policy (and attitudes are calculated by
multiplying likelihood perceptions and desirability perceptions;
Fishbein & Ajzen, 1975). Thus, differences in the quality of arguments
can be created by changing the likelihood or desirability components of
the statements (Petty & Wegener, 1991).
Low-elaboration (non-thoughtful) processes. As noted earlier,
effortful elaboration (thinking) is less likely when motivation or
ability to think is lacking (e.g., because the attitude issue is not
likely to affect the message recipient or the message is encountered
when the person must also pay attention to competing activities). When
this occurs, attitudes can still be formed or can change, but by using
``short cut'' (heuristic) strategies that take less cognitive effort.
For example, attitudes can be influenced by classical conditioning,
in which positive or negative stimuli are simply associated with the
attitude object. In fact, many advertisements use this type of strategy
by associating pleasant music or scenery with a product, even when the
music or scenery is utterly irrelevant to the qualities of the product.
On a related note, people might also use a ``How do I feel about it?''
heuristic, in which they mistake feelings created by an unrelated
activity (such as the weather outside or watching a happy or sad movie)
as being reactions to the attitude object or issue (see Clore &
Schnall, 2005).
Other relatively simple processes include familiarity-based liking
of objects that one has seen often (even if seen so briefly that one
cannot report whether one has previously seen the object or not; Kunst-
Wilson & Zajonc, 1980). One reason for this mere exposure effect may be
that ease in perceiving the object (because it has been seen before) is
experienced positively (Winkielman & Cacioppo, 2001).
When heuristics are used to quickly and easily determine what one's
attitude should be, source characteristics (``I should agree with
people I like'') that are irrelevant to the primary features of the
object may, nonetheless, influence people's attitudes (see Petty &
Wegener, 1998). The impact of these peripheral aspects of the
communication is likely to be different, however, when thinking a lot
about available information. In such circumstances (when people are
paying close attention to the qualities of information about the
object), the influence of peripheral aspects of the persuasive attempt
should be minimized (Petty & Cacioppo, 1986b; Petty & Wegener, 1999).
General ELM principles. Therefore, the ELM framework explains when
communicators would expect peripheral aspects of a communication to
influence attitudes (when motivation or ability to think is low) and
when they should not (when motivation and ability are high). This would
explain why some relatively peripheral features, like the physical
attractiveness of the message source, influences attitudes in some
situations (low motivation or ability), but not in others (high
motivation and ability; Puckett, Petty, Cacioppo, & Fisher, 1983). In
contrast, when motivation and ability to think are high, the quality of
arguments provided in the message should have strong effects on
recipient thoughts and attitudes. But when motivation or ability is
lacking, the quality of arguments should have little effect (Petty &
Cacioppo, 1986b).
Persuasion is not so simple as to say that any one variable can
only influence persuasion when people are thinking a lot or a little,
however. For example, consider a communication given by an expert
source (e.g., a Princeton Professor of Education advocating a new
educational policy; Petty et al., 1981). The expertise of the source
can be used as a relatively simple ``peripheral cue'' when thinking is
minimal (``I should agree with experts''). However, source expertise
can also influence attitudes when people are thinking carefully, if the
right conditions exist. For example, if the available information is
somewhat ambiguous (open to interpretation), then, as people think
carefully about the information, it may be interpreted more positively
if provided by an expert rather than a non-expert (Chaiken &
Maheswaran, 1994). The idea that the same persuasion variable can
influence attitudes for different reasons as the level of elaboration
(thinking) increases from low to high levels is referred to as the
variable serving ``multiple roles'' in persuasion (see Petty & Wegener,
1998, 1999).
Perhaps the key reason that researchers pay close attention to the
level of thinking by research participants is that the level of
thinking determines how consequential the resulting attitude will be.
When attitudes are formed or changed in more thoughtful ways, they last
longer over time, they better resist future attempts at change, and
they serve as stronger guides for future thoughts and behaviors (Petty,
Haugtvedt, & Smith, 1995; Wegener, Petty, Smoak, & Fabrigar, 2004). Of
course, when seeking to influence the use of energy by consumers or the
purchase of energy-efficient products, it would be important not only
to create attitudes favorable toward those behaviors, but to create
attitudes strong enough to influence those behaviors.
Examples of Attitudes toward Nuclear Power
Consistent with my basic science orientation, over the years, I and
my colleagues have used a variety of message topics in studying
attitude change. In a number of cases, however, we have used messages
that propose the building of new nuclear power plants. Let me given
some examples of specific research questions that have guided portions
of this work.
Values and information processing. For many years, attitudes
researchers have associated ``strong'' attitudes (i.e., those that
resist change and influence behavior) with attitudes that express or
connect directly to one's cherished values (e.g., Sherif & Cantril,
1947; Maio & Olson, 2000a). For example, in one early program of
research, Ostrom and Brock (1969) asked message recipients to consider
a message in relation to values the recipients viewed as personally
important or unimportant. After measuring attitudes, Ostrom and Brock
presented an opposing message attempting to change the newly formed
attitudes and found that attitudes initially formed while considering
important values were more resistant to change than attitudes formed
while considering unimportant values. This result was viewed as
consistent with ``value expressive'' or ``value linked'' attitudes
being stronger if the values are important to people.
However, this ``structural'' view of value effects on attitude
strength is not the only possibility. As mentioned earlier, from an ELM
point of view, increases in thinking about the issue can also result in
strong attitudes (Wegener et al., 2004). Therefore, it seemed plausible
that thinking about important rather than unimportant values might make
the issue seem more important or interesting, and this increased
thinking might be responsible for the creation of stronger attitudes.
Indeed, in a series of studies, consideration of important values led
to higher levels of information processing than consideration of
unimportant values, and this amount of thinking was responsible for the
strength (resistance to change) of the resulting attitudes (Blankenship
& Wegener, in press). Measures designed to tap ``value expression''
showed that the increases in thinking per se did not create attitudes
that ``expressed'' the values, as assumed by Ostrom and Brock (1969)
and Sherif and Cantril (1947).
One important feature of the values and processing work is that
consideration of important values increases processing of information
about topics viewed as utterly irrelevant to message recipients. For
example, a number of the studies addressed proposed admission of an
Eastern-European country into the European Union (a topic participants
viewed as quite irrelevant to them), and one of the studies proposed
the building of nuclear power plants in Canada (another topic of
relatively little relevance to our message recipients).
As described in the ELM sections earlier, topics of low personal
relevance typically receive little thinking, and attitudes produced (by
mostly peripheral means) are not very consequential. However, in many
domains (such as health, where people often view consequences of
negative health behaviors as unlikely to occur for them), practitioners
would want people to think about and form consequential attitudes on
those topics. Asking people to consider important values (or even
briefly presenting the values prior to message presentation,
Blankenship, 2006) may be one easy way to get people to think about
topics they would otherwise ignore (often to their own peril).
Another applied implication is that persuasive messages about non-
threatening, personally irrelevant topics might be useful in creating
attitudes that impact perceptions and behavior on more relevant topics.
For example, people start out as less favorable toward the building of
a nuclear power plant in their community than they are toward nuclear
power in general (Rankin, Nealy, & Melber, 1984; Rosa & Dunlap, 1994).
But messages about nuclear power in general or in distant places (where
less inherent resistance exists) may be viewed by message recipients as
irrelevant to them and unworthy of their attention. A technique such as
consideration of important values might prove helpful. It can use the
low-relevance topic, where initial resistance to the message is
relatively low, but because the technique can produce high levels of
processing, the attitudes produced are then harder to change and more
likely to guide later decisions and behavior. It may be, therefore,
that thoughtful persuasion of the benefits of nuclear power in Canada
could be useful in lessening the public resistance to widespread
development of nuclear power closer to home.
Message order effects. The ordering of different messages has also
been of interest for many years (e.g., Lund, 1925; Hovland & Mandell,
1957), but results have been mixed. Sometimes the first message
encountered is more persuasive (a primacy effect, e.g., Lund, 1925),
and sometimes the second/last message received is more persuasive (a
recency effect, e.g., Hovland & Mandell, 1957). Summarizing the work to
date, Hovland (1957) speculated that primacy might be most likely when
presenting information on an unfamiliar/novel topic. Although research
on message order flourished in the early 1960s, results continued to be
mixed, with a number of results inconsistent with Hovland's (1957)
contentions (see Lana, 1961; Rosnow & Robinson, 1967). As recently as
1993, a prominent attitudes text (Eagly & Chaiken, 1993) expressed
pessimism that consistent message order effects would be discovered
anytime soon.
However, consistent predictions could be made using the ELM notion
that higher levels of information processing should lead to stronger
attitudes that are more resistant to change. In a pair of studies
reported by Haugtvedt and Wegener (1994), we showed that high levels of
personal relevance consistently lead to primacy effects (greater impact
of the first message), and low levels of personal relevance lead to
recency effects (greater impact of the second/last message). Consistent
with the ELM theorizing, greater processing of the first message should
create stronger attitudes prior to receiving the second message. With
stronger attitudes (when processing of the first message is high rather
than low), the message recipient is able to resist the second message,
resulting in primacy. In contrast, when attitudes following the first
message are weak, the second message is able to exert more persuasive
impact (for additional discussion, see Haugtvedt & Wegener, 1994).
These effects were found when the two messages favored and opposed
the building of nuclear power plants (when high relevance conditions
suggested that the plants be built in the message recipients' own and
nearby states, and low relevance conditions suggested that the plants
be built in distant states). Consistent with the basic science approach
of generalizing the effects across different types of topics, the same
effects were also found using a proposal for an educational policy
(i.e., institution of senior comprehensive exams for graduating
seniors, Petty & Cacioppo, 1986a).
Ambivalence and processing. Finally, a recent set of research
studies has examined the effects of attitude ambivalence on information
processing. Ambivalence occurs when people realize that there are both
positive and negative aspects of an attitude object or policy. For
example, people might believe that nuclear power is good because of the
lack of greenhouse gas emissions, but is bad because of the radioactive
waste.
Research on persuasion has shown that people tend to think
carefully about information on topics about which they are ambivalent
(Maio, Bell, & Esses, 1996). One way to understand this effect would be
to say that people are unsure as to what their attitudes should be when
they are ambivalent, and they actively process available information in
an attempt to determine what their attitude should be (see Chaiken,
Liberman, & Eagly, 1989).
However, another prominent feature of ambivalence is that it is
uncomfortable for people to be ambivalent. Because of this, they may be
motivated to use information processing to reduce the ambivalence.
Note, however, that not all information should be equally capable of
reducing ambivalence. Consider a person who is moderately favorable
toward nuclear power, for example, because s/he sees more positive than
negative features. This person would be more likely to overcome the
ambivalence by learning about additional positive features (because the
larger number of positive features will ``dwarf'' the negative features
and reduce the feeling of conflict). If the person learns about new
negative features of nuclear power, this would only increase the
ambivalence (because there would be more negative perceptions to
counter the positive, and the feeling of conflict would increase).
This suggests that effects of attitude ambivalence should not be a
general increase in information processing (as suggested by past
research). Instead, ambivalent people should want to process
information that adds new information supporting their existing
position (because it could help to decrease the ambivalence). In
contrast, people experiencing ambivalence should want to avoid
processing of information that opposes their existing attitude (because
the information threatens to increase their ambivalence).
Clark, Wegener, and Fabrigar (under review) reported evidence
consistent with the proposal in a series of three studies (one
addressing attitudes toward nuclear power, and two addressing attitudes
toward the taxing of junk food). When people were relatively ambivalent
before they received the persuasive message, they processed the message
to a greater extent when the message was relatively agreeable (i.e.,
focusing on features of the proposal that further supported the message
recipients' views before they received the message). When the message
disagreed with the ambivalent person's pre-message assessments, message
recipients did not think carefully about the information. In addition,
ambivalent participants perceived the agreeable messages as more likely
than the disagreeable messages to reduce ambivalence, and these
perceptions of potential for ambivalence reduction led to the
processing differences across messages that were relatively agreeable
or disagreeable.
However, when participants were relatively unambivalent, they
showed a very different pattern of message processing. Unambivalent
people processed messages more when the messages were disagreeable
rather than agreeable. These results were consistent with past research
that did not address ambivalence, but likely examined situations where
ambivalence was relatively low. In that past research, disagreeable
messages were thought to receive more scrutiny because they threaten
the person's attitude or self confidence (e.g., Cacioppo & Petty, 1979;
Edwards & Smith, 1996). Although this may be for people experiencing
low levels of ambivalence, it appears that motives to reduce
ambivalence overpower any attitude-threat effects and entirely reverse
the traditional effects of message position on amount of message
processing.
When one reorganizes these studies to examine effects of
ambivalence on message processing, the Maio et al. (1996) effects are
limited to the processing of relatively agreeable messages. When the
person already agrees with the point of view in the message, s/he is
more likely to process the message when feeling high rather than low
levels of ambivalence. In contrast, with disagreeable messages, people
experiencing high levels of ambivalence are less likely to think
carefully about that message than people experiencing little or no
ambivalence.
Therefore, if applied researchers had assumed (as previous research
had suggested) that ambivalence would generally lead to careful
thinking (and careful thinking would lead to strong attitudes, as
discussed in the ELM), these researchers would have been sorely
mistaken. In fact, if using a disagreeable message (which is the
typical kind of message when changes in attitudes are sought), the
ambivalent people are significantly less likely to process information
carefully (and, therefore, their attitudes would remain weak and
unlikely to guide future behavior).
Using the Research to Inform Policy
I am not sure if informing policy is the primary role of research
on attitudes and attitude change. It is true that the need for policies
like government subsidies (e.g., to make environmentally friendly forms
of energy more affordable) might be more necessary when consumers do
not strongly favor use of those new technologies. It may also be true
that government policies influence how much public support a new energy
source receives. For example, it may be that support for use of ethanol
may stem, in part, from people wanting to support farmers and rural
communities (which also implies support for subsidies that go to
support farmers or ethanol producers).
It seems to me, however, that research on attitudes and attitude
change may be more useful in helping to support and implement
government policies pertaining to energy use. For example, it may be
deemed as useful or even necessary for our country to transition away
from use of fossil fuels (which are polluting and come largely from
beyond our borders, producing a security premium for obtaining a steady
supply of these fuels). But, as noted earlier, an effective transition
from cheap fossil fuels to more costly (and perhaps less convenient)
new technologies will take more than technology development alone.
Public attitudes, values, and norms supporting the transition will
go a long way toward paving the way for new technologies to take hold
and become commonplace. For example, our local municipality recently
implemented a city ordinance restricting smoking in public places. Both
before and after this policy decision was made, there was a flurry of
advertising supporting this decision prior to implementation of the
ordinance. These efforts were clearly not intended to influence the
members of the City Council, who had already decided how they were
going to vote. The advertising was there to prepare the public for the
change and to persuade them that it makes good health sense for
employees and patrons. If successful, such efforts increase the
likelihood that the ordinance will receive little opposition in the
future, and the restrictions will become an accepted norm.
If Federal, State, or local government views particular energy
sources or technologies as economically or politically desirable, these
entities (or policy-makers within them) may want to persuade the public
that these energy sources or technologies are desirable. Indeed, such
persuasion may be necessary for the public to accept use of the new
technologies in their communities. The relevance of these ideas becomes
apparent when considering that, in many places around the country, our
energy-producing infrastructure is aging and new power plants will be
necessary. Yet, the process of building a new plant is often held up,
in part, by company officials trying (unsuccessfully) to convince local
residents that the plant will not create negative consequences for
their community.
Part of this likely stems from incomplete understanding of the
principles studied in attitudes and persuasion. For example, utility
officials presenting information about the environmental impact of
their proposed plants are not likely to be viewed as credible
communicators. They have a clear self-interest, and might often be
viewed as untrustworthy. In many of these instances, a better grasp of
persuasion principles might suggest use of an independent third-party
communicator who can provide information without being perceived as
having ulterior motives. Assuming that strong (persuasive) arguments
are available (e.g., new power plants can often produce many times the
power of old plants with far less pollution than the old, smaller
plants), this information may be processed in a more objective manner
if presented by a trusted and expert source.
It is also true that initial concerns may not be the same as long-
term concerns. For example, although people oppose the building of a
nuclear power plant more when it is proposed to be near rather than far
away from them, the same is not true for opposition of plants that are
already built. That is, people are not more negative toward nuclear
power (or oil development) when they live near to it rather than far
away (Smith, 2002). Similarly, people who live near a nuclear power
plant tend to become more favorable toward it over time--a long-term
adaptation effect (van der Pligt, Eiser, & Spears, 1986, 1987).
Therefore, for energy sources that promise long-term benefits (and that
operate in safe, and environmentally friendly ways), it may be that the
primary public perception obstacles are incurred early in the process--
when obtaining zoning and permits to build the plant.
Stepping outside my own area of attitudes and persuasion research,
I should also mention that other work in the SEPAE area of the Purdue
Energy Center is very explicitly aimed at assessing policy alternatives
per se. For example, Dr. Tyner's economic analyses specifically address
the influences of policy alternatives on whether the technology is
likely to draw private investment or not. Perhaps other panel members
will also address the links between other social science areas and
policy.
4. What basic social psychology research questions relevant to the
energy challenge remain unanswered? Do social scientists have all of
the tools they need to answer these questions and adequate resources to
pursue promising research directions? Are there of yet undeveloped or
underdeveloped technologies or methodologies that would help advance
this research?
Unanswered Questions
In over 80 years of empirical social psychology research, much has
been learned about how people form and change their attitudes. But for
virtually every variable in the persuasion setting, and for each
process that has been identified, there exists additional questions
that have not yet been examined. Let me provide examples of three types
of research questions that seem worth pursuing--one dealing with
specific predictors of attitude strength, a second dealing with weak
attitudes influencing later information processing in ways that make
them stronger over time, and a third addressing the specific cognitive
mechanisms that connect attitudes and other psychological variables to
behavior. By focusing on attitude strength and behavior, I do not mean
to imply that we know everything about attitude change. We certainly do
not. However, because the ultimate goal of most attempts at attitude
change is to change behavior, a focus on behavior in future research
seems as likely as any other focus. I want to be clear, however, that I
write this section with the caveat in mind that every year seems to
produce new questions that simply were not in the collective
consciousness of researchers, sometimes even months before.
Necessary and Sufficient Strength-Related Features of Attitudes
I have mentioned at various points in this testimony that the goal
of persuasion is not simply to produce positive attitudes toward one's
desired product or policy. The goal is to produce a favorable attitude
that is also strong enough to last over time, to resist future attempts
at change, and to guide future thinking and behavior (Petty & Krosnick,
1995). This basic idea has been in the literature for some time, but
which properties of the attitude are sufficient or necessary for the
attitude to produce these desired consequences? Many properties have
been studied (e.g., accessibility, ambivalence, certainty, direct
experience, knowledge, elaboration; Wegener et al., 1995). However,
these properties of attitudes have often been studied in isolation, so
the relative contribution of each attitudinal property remains unclear.
Also, many of the attitudinal properties are only weakly or moderately
correlated with each other, so there is not a single unified
``strength'' property of attitudes (Krosnick, Boninger, Chuang, Berent,
& Carnot, 1993).
This leaves open the real possibility that the contribution of
different strength-related attitudinal properties might differ across
the types of attitude consequences of interest. For example, consider a
context in which the attitude object is relatively novel (as many new
energy technologies would be) and the primary question is whether one's
attitude will persist long enough to guide future behavior. In this
situation, it may be that relatively ``passive'' attitude properties
such as accessibility in memory or certainty might be especially
important (it turns out that accessibility and certainty are
empirically linked, in that both can be increased by simple repeated
expression of one's attitude; Holland, Verplanken, & van Knippenberg,
2003).
On the other hand, when the attitude is controversial and the
person is likely to encounter many diverging opinions, the ability of
the attitude to resist change may be the key. In such settings, the
most important strength-related properties of attitudes may be more
``active'' qualities that give the person greater ability to counter-
argue ``attacking'' messages. If so, then attitudes based on large
amounts of knowledge or on high levels of elaboration might be the
attitudes best able to hold fast in the face of the diverging opinions.
These questions have simply not been addressed in existing attitude
strength research.
Initially Weak Attitudes Becoming Stronger Over Time
Another interesting set of research questions may address the
possible impact of initially weak attitudes. In existing attitude
strength research, the weak attitudes are simply treated as relatively
non-consequential (i.e., unlikely to last over time, influence
behaviors, etc.). However, there may be at least some ``weak''
qualities of attitudes that create the potential for the attitudes to
``snowball'' into becoming strong. For example, as described earlier,
recent research in our lab shows that ambivalence and message position
combine to influence information processing (Clark et al., under
review). That is, ambivalent people think carefully about information
that agrees with their pre-message attitudes but avoid thinking about
information that disagrees with their pre-message attitudes.
In our initial studies, participants were given the persuasive
message rather than choosing to view it on their own. However, these
results from our initial research would also have direct implications
for what ambivalent and unambivalent people would choose to receive if
given the choice. A result parallel to our information processing
studies would be for people experiencing ambivalence to be more likely
to expose themselves to agreeable rather than disagreeable information.
People experiencing little ambivalence may be more balanced in their
choices or might even expose themselves to more disagreeable rather
than agreeable information.
But notice what the effects of this exposure are likely to be. When
ambivalent people expose themselves to agreeable information, this
should make them less ambivalent and should, therefore, make their
attitude stronger. In contrast, exposure to balanced or more
disagreeable information would make people's attitudes more ambivalent
and, therefore, weaker. One interesting aspect of this possible pattern
of results is that exposure to attitude-consistent information is one
of the results that has been discussed in past research as indicative
of attitude strength (i.e., as ``impact on thoughts and behavior'').
Because of this, past researchers have expected (and some have recently
found; Brannon, Tagler, & Eagly, 2007) that people with stronger
attitudes are more likely to seek attitude-consistent rather than
attitude-inconsistent attitudes. These effects are rather small in
magnitude, however, and we suspect (but have not yet tested) that this
overall pattern masks the effects of some specific types of weak
attitudes (especially those that are ambivalent).
More generally, it would change the attitude strength literature in
important ways if specific forms of ``weak'' attitudes actually create
stronger preferences for attitude-consistent information or create
stronger influences on other types of thinking and behavior.
More Specific Mechanisms to Connect Attitudes and Behavior
In many respects, the study of attitude change is predicated on the
ability of attitudes to influence future behavior. Indeed, much
research over the years has studied when attitudes predict future
behavior and when they do not (and other psychological constructs, such
as norms, influence behavior instead; see Ajzen & Fishbein, 2005). This
emphasis seems justified, both for the study of attitudes in general,
and for studies of attitudes in relation to energy.
There are a number of respects in which we can increase our
understanding of exactly how attitudes or other psychological
constructs influence behaviors, however. For instance, much research on
attitude-behavior consistency speaks of ``prediction'' of behavior, but
there is an important distinction to be made between prediction of
behavior and influence on behavior (Fabrigar, MacDonald, & Wegener,
2005). For example, consider a person who forms a positive attitude
toward hybrid automobiles after riding in a friend's hybrid automobile.
Suppose that this person goes to buy a new car a few months later, but
the person does not buy a hybrid car.
This could happen for many reasons, but consider two distinct
explanations for this lack of attitude-behavior consistency that have
not been systematically differentiated in the attitudes literature to
date. One possibility is that the person's positive attitude toward
hybrid cars persisted unchanged right up until the purchase decision,
but the attitude did not prove strong enough to guide the behavior when
the purchase was made. However, there is another possibility--one that
produces the same lack of attitude-behavior consistency (at least when
using the initial positive attitude to predict the later behavior).
That is, the person may use his or her current attitude when deciding
to purchase a new automobile, but the attitude may have changed in the
months since the original positive attitude was formed. This latter
situation is not really a case of attitude-behavior inconsistency at
all, but the change in attitude means that the earlier positive
attitude did not carry through to guide the purchase behavior.
In fact, the social psychology program at Purdue University will be
holding a conference during May of 2008 with the explicit theme of
motivating work to develop more complete theory connecting
psychological antecedents with behavior.
We Cannot Forget about Applied Energy Research
The question posed to me by the Committee was framed in terms of
basic social psychology research, and I am entirely comfortable with
that, because I am first and foremost a basic scientist. I should also
note, however, that technology-focused researchers do not always
appreciate the fact that we are working to identify generalizable
persuasion principles that operate across topic domains. Quite
naturally, practitioners focusing on a particular topic will view our
research as more relevant and informative to them if it deals
specifically with their domain of interest (be it a specific form of
energy, a particular health condition, or some other specific topic).
Because of this, there may be benefits of applied research that
addresses psychological processes that have been identified in
unrelated domains but would have clear relevance to influencing
attitudes related to energy. At a minimum, if it is important to direct
attention in the energy domain toward the psychological principles we
discover, it may be helpful to fund some portion of the basic research
(e.g., that funded through NSF) in ways that explicitly incorporate
energy-related topics. Doing so would ensure that energy researchers
and practitioners identify the persuasion (and other social psychology)
principles discovered as relevant to the energy domain.
Even in areas where the basic research has not used energy-related
topics, telephone surveys and other tools for attitude measurement can
be used to determine the current attitudes, beliefs, and knowledge that
people hold about energy topics. When the characteristics of current
attitudes are documented, for example, this would tell energy
researchers which basic persuasion principles are relevant to attitudes
in that energy domain. For example, if surveys show high levels of
ambivalence for people's attitudes toward clean coal technologies, this
would suggest that the research on attitude ambivalence described
earlier (e.g., Clark et al., under review) is quite relevant.
Tools and Resources
One of the benefits of social science research in general, and
social psychological research in particular, is that it is very
efficient from a cost standpoint. With some sub-disciplines excepted
(such as social, affective, or cognitive neuroscience, which use
Functional Magnetic Resonance Imaging, fMRI, techniques), most research
laboratories can be constructed with $100,000 or less. Once a lab is
established, the primary costs are those of personnel (i.e., faculty
time, graduate students, post-doctoral fellows, research assistants)
and research participants (especially if recruiting research
participants from the surrounding community).
Because of this efficiency, it seems likely that one might often
gain more ``bang for the buck'' from research on behavior change than
on higher-cost funding of new (as yet untried, and often economically
unfeasible) energy-production technologies. This is not an argument to
reduce funding to develop new technologies. But the research on basic
persuasion principles will be relevant across many such technologies,
and the transition away from fossil fuels will absolutely require
changes in behavior that involve energy conservation (using current
technologies) as well as adoption of new energy sources, policies, and
products. More generally, this transition will require policies to
encourage investment, persuasion of potential consumers, changing norms
to encourage adoption, and other social, economic, or governmental
interventions to facilitate shifts in energy use.
Unfortunately, despite the relative efficiency of social science
research, there is much less federal funding available to fund this
research (at least within social psychology) than there used to be. As
I described earlier, this is largely a function of the shift in funding
priorities for the National Institute of Mental Health. This shift may
have made sense for that institute if its primary mission is, indeed,
severe mental illness. However, this shift in priorities has left a
sizable gap in funding for basic science whose results and theory cut
across many basic and applied disciplines. It is extremely important to
find a new home for federal funding of basic research in social
psychology in general and of research in attitude change in particular.
New Technologies or Methods
Most social psychological research uses existing computer
technology in creative and useful ways. Therefore, many of the new
research methods come from the creativity of researchers, rather than
the development of new research technology per se. This is not true of
all social psychology research, however. As I mentioned earlier, my
colleagues in social, cognitive, or affective neuroscience use a
variety of techniques that I do not (including fMRI and other versions
of brain imaging or scanning).
There are also a variety of new ``implicit'' measures of attitudes
that have been developed recently to tap into attitudes and perceptions
that people are reluctant to share or of which people might not even be
aware. These typically use existing computer technology, but they
represent some very interesting methods that are just beginning to pay
big theoretical dividends. For example, implicit measures of attitudes
have been shown to improve prediction of behavior in some contexts and
for some behaviors, even when traditional direct measures of attitudes
are also used (see Ajzen & Fishbein, 2005; Fazio & Olson, 2003). There
are many unexplored questions using these techniques.
The long-term impact of these methods for theories of attitudes and
attitude change are still unclear. It is also important to note,
however, that there is still much to learn using more ``conventional''
methods to ask people about their attitudes and thereby examine how
factors in a persuasive message or in the environment influence the
attitude.
Finally, it is also important to note that social psychologists'
focus on cognitive and motivational processes requires sophisticated
statistical techniques and research methods (see Reis & Judd, 2000;
Sansone, Morf, & Panter, 2004). These developments help to build
stronger evidence in tests of psychological theories, and parallel
analyses then receive use in related academic and applied disciplines
(for a recent example advance in this area, see Muller, Judd, &
Yzerbyt, 2005).
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Biography for Duane T. Wegener
Dr. Wegener received his Ph.D. in Social Psychology from Ohio State
University in 1994. After serving as an Assistant Professor of
Psychology at Yale University for three years, he joined Purdue
University in 1997 as an Associate Professor and was promoted to
Professor in 2003. Dr. Wegener serves as one of three Initiative
Leaders for the Social, Economic, and Political Aspects of Energy Use
and Policy, a research initiative within the Energy Center at Discovery
Park--an interdisciplinary research hub at Purdue University.
Dr. Wegener's research focuses on attitudes and persuasion,
especially influences on the amount and nature of information
processing and the consequences of the resulting attitudes for later
thinking and behavior. Dr. Wegener has been PI or Co-PI on grants in
social psychology (National Science Foundation), health (focusing on
processing of health communications; Canadian Institute for Health
Research), and energy (focusing on energy-related attitudes and
decision-making; National Science Foundation--Human Social Dynamics
Program).
In 2001, he received the American Psychological Association (APA)
Early Career Award for distinguished contributions to the science of
social psychology. Dr. Wegener's research has resulted in over 50
publications in journal articles and book chapters. He is currently a
Section Co-Editor for the Social and Personality Psychology Compass,
and he served as Associate Editor for Basic and Applied Social
Psychology and the Personality and Social Psychology Bulletin. He has
also served as an editorial board member for the Journal of Personality
and Social Psychology, the Journal of Experimental Social Psychology,
and Personality and Social Psychology Bulletin, and as an ad hoc
reviewer for over 30 academic journals.
Chairman Baird. Thank you, Dr. Wegener.
Dr. Laitner.
STATEMENT OF MR. JOHN ``SKIP'' LAITNER, VISITING FELLOW AND
SENIOR ECONOMIST, AMERICAN COUNCIL FOR AN ENERGY EFFICIENT
ECONOMY
Mr. Laitner. Good morning, Chairman Baird, Ranking Member
Ehlers, Members and staff of the Subcommittee. I recently
joined the American Council for an Energy Efficient Economy as
their Senior Economist for Technology Policy. However, I am now
celebrating 37 years in the energy policy arena, and in those
nearly 4 decades of effort, there have certainly been some
disappointments along the way. At the same time, however, I
have never been more confident in telling this subcommittee
that the United States has never been better positioned to move
onto a path of sustainable energy production and consumption,
one that promotes both productivity and economic prosperity if
we choose to do it. But it is not really just about technology
or economics, rather it is about the human element, the
innovative spirit, and with apologies to my colleagues from the
south, about our vaunted Yankee ingenuity. In that sense, a
productive and prosperous energy policy equally depends on a
better understanding of the human dimension. What is it that
might be done to motivate that ingenuity and what might be done
to translate it into productive action.
Let me give you a very concrete example. Some years ago a
colleague of mine had a really good idea for a new technology
but in fact it wasn't really a new technology, it was seeing a
different blend of technologies, a new design, a rearrangement
of existing ones, a new configuration that if implemented would
save manufacturers a good bit of money. Suffice it to say that
if my estimates are correct, by 2025, the annual savings from
this new energy efficient technology would rival the
anticipated output from the Alaska National Wildlife Refuge. It
is potentially very big.
So here is where the social science comes in. First, what
is it that really motivated him to develop a prototype of this
technology? Second, what gave him the inspiration to see a new
way of doing things? Third, critically, why can't he get it to
the market? He seems to hold onto it, always wanted to make
just one more refinement. He doesn't seem to know how to really
close the deal, and given the Chairman's background, I think he
might have some interesting insights into that kind of
behavior. But fourth, how many more are out there just like
him? I suspect a lot. And how many more could there be if we
encouraged a greater entrepreneurial enthusiasm? Again, I
suspect a lot. Fifth and finally, what can we do to motivate a
greater level of innovating seeing entrepreneurial action? This
is all from the production side. There are similar questions
from the perspective of the consumer. What is it that
encourages early and then accelerated adoption of new
technologies? We have heard a bit of that already. What does
this tell us about the energy policy signal beyond the price
signal?
Mr. Chairman, I submit the energy problem is not purely a
technology problem. While there is already a good bit of
science involved to be sure and there is clearly a need for
more research and disciplines like material science and
advanced electronics, more generally in biology, chemistry, and
physics, fundamentally I believe it is equally a problem with
the human dimension. Yes, we are seriously under-funding our
R&D efforts and especially for energy efficiency but it is even
worse for the social sciences.
Members of the Subcommittee may be interested in at least
one set of energy-related statistics to help frame these last
thoughts. Based on the 2007 edition of British Petroleum's
Energy Statistical Review, it appears the U.S. enjoys what is
referred to as proven fossil fuel reserves of around 130
billions of oil equivalent. That is good. At our current rate
of consumption, that is roughly a 52-year resource. The bad
news is about 90 percent of that resource is coal. But the good
news is in the spirit of Leonardo daVinci's motto, sapere
vedere, Tuscan dog Latin meaning to know how to see, we may
also see something more on the order of 900 billion tons of
energy-efficiency reserves over the next century. As it turns
out, we may use about two-thirds of this large efficiency
resource in our normal pattern of growth. However, that would
still mean an energy consumption of about three and one-half
times greater than we are using today by the end of the
century. That is huge. Depending on how much of that energy
comes from renewables or other clean energy resources, that may
not be good enough. So the question then becomes, how do we
unlock that remaining one-third of the efficiency resource so
that we might keep our total energy use to say less than 50
percent growth compared to today's use of energy and still
maintain a robust economy? How exactly do we get at it? At a
minimum, the answer is at least one part accelerated R&D and
one part new insights from the social sciences, an expanded
investment in our understanding of the human dimension.
In answering this question at least in part, let me finally
turn to an analogy drawn from baseball. Pitcher Nolan Ryan was
something of a hero of mine. He won I think 324 games over his
career which included a stint with President Bush's own former
team, the Texas Rangers. But how many games would Nolan Ryan,
the so-called Ryan Express, how many would he have won had he
taken the field without his catcher or without his infield? In
a very similar way, if we are to design and implement an energy
policy that sustains our economy in a highly prosperous way, we
should be funding and fielding a complete team effort. Yes, we
need improved energy efficiency standards and smarter
incentives. Yes, we need more research and development, but
yes, we also need to support more research and more funding for
that research in the field of social sciences.
I thank you for this opportunity to speak. I would be happy
to take questions.
[The prepared statement of Mr. Laitner follows:]
Prepared Statement of John A. ``Skip'' Laitner
Summary
This testimony responds to an invitation from the Subcommittee on
Research and Science Education to help members explore the relevance of
the social, behavioral and economic sciences in shaping a more
productive pattern of energy use and a more balanced set of energy
policies. Any useful policy assessment clearly must include some form
of economic analysis. Prices and incomes do matter in the evaluation of
public policy, but they are not all that matter. Technological
innovation and market dynamics are among those things that influence
our demand for energy-related goods and services. Social norms and
structures also play a role. These all, in turn, are shaped by culture,
beliefs, values, preferences, habits, and the availability of
alternatives.
For the most part, current economic policy models fail to
adequately capture the ways in which individual energy consumption
patterns change in response to both economic and noneconomic policies
and programs. Therefore, policies based on these models have
consistently overlooked the energy savings that can be achieved through
the accelerated adoption of energy-efficient technologies, changing
social preferences, and more energy-aware behaviors. As such, these
models have tended to underestimate the energy savings that can be
achieved while generally overestimating the costs of achieving
increased levels of energy efficiency. The inaccuracy of these models
has large and important implications for both energy policy and climate
change mitigation policy. There is good news in all of this but, as we
shall see, there is work ahead.
Given this circumstance, and based on the available evidence, the
American Council for an Energy-Efficient Economy (ACEEE) believes three
distinct recommendations are in order. First, and after further review,
the Subcommittee should issue a set of findings that confirms our
testimony. We think it will send a positive signal to the economics and
social science communities that there is clear room for improvement.
Second, support the development and funding of a National Energy
Efficiency Data Center (NEEDC), which would be a national nonprofit
organization whose purpose will be to collect, organize, disseminate
and archive energy efficiency and social science statistics,
particularly those related to public policies and programs. Finally,
more research and greater research funding will provide the means to
expand our knowledge and understanding of how human behavior and choice
can increase energy efficiency, reduce our energy dependency, and
reduce our impact on the global climate while still maintaining a
robust economy.
Introduction
My name is John A. ``Skip'' Laitner and I am the Senior Economist
for Technology Policy for the American Council for an Energy-Efficient
Economy (ACEEE), a nonprofit organization dedicated to increasing
energy efficiency as a means of promoting both economic prosperity and
environmental protection. I am here today at the invitation of this
subcommittee to explore the relevance of the social, behavioral and
economic sciences to energy use and policy. I thank you for the
opportunity to testify today. Working with me in the preparation of
this testimony and also here today is my ACEEE colleague, Karen
Ehrhardt-Martinez. She holds a professional degree in sociology and
works with me on a variety of economic and technology issues.
Any useful policy assessment must include some form of economic
analysis. Prices and incomes do matter in the evaluation of public
policy, but they are not all that matter. Indeed, the great English
economist Joan Robinson wrote in 1947 that ``economics science has not
solved its first problem--namely what determines the price of a
commodity?'' \1\ That remains true today, now 60 years later. But I
might add, neither has economics determined exactly what magnitude of
income is sufficient to satisfy either individual or household demands.
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\1\ Robinson, Joan. 1947. An Essay on Marxian Economics. London,
England: MacMillan, page 79.
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Among those things that influence our demand for goods, services,
and amenities, and that also impact things like technological
innovation, market dynamics, and personal choice are social norms and
structures. These, in turn, are shaped by culture, beliefs, values,
habits, alternatives, and basic human and social needs. In short, there
is compelling evidence that an accurate economic analysis (of either
energy use or the environmental impacts associated with the production
and consumption of energy) requires a broader understanding of human
behavior and choices. It also requires an understanding of the ways in
which they are shaped by the institutional and social frameworks of our
society. Recent studies of climate change policy have also stressed the
importance of human choice and human behavior for the development of
effective policies that reduce emissions and mitigate climate
change.\2\ However, current economic models fail to adequately capture
the ways in which individual energy consumption changes in response to
economic and noneconomic policies and programs.\3\ Therefore, policies
based on these models have consistently overlooked the energy savings
that can be achieved through changing social preferences and the
accelerated adoption of energy-efficient technologies and more energy-
aware behaviors. As such, these models have tended to underestimate the
energy savings that can be achieved while generally overestimating the
costs of achieving increased levels of energy efficiency. The
inaccuracy of these models has large and important implications for
both energy policy and climate change mitigation policy. In my
testimony here today, I will expand on these notions a bit more as I
try to answer three questions that this subcommittee has posed for me:
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\2\ Brewer, Garry D. and Paul C. Stern, Eds. 2005. Decision-Making
for the Environment: Social and Behavior Science Research Priorities.
Committee on the Human Dimensions of Global Change, National Research
Council, Washington, DC: National Academies Press; and also see, Stern,
Paul C., Oran R. Young; and Daniel Druckman, Eds. 1991. Global
Environmental Change: Understanding the Human Dimensions. Committee on
the Human Dimensions of Global Change, National Research Council,
Washington, DC: National Academies Press.
\3\ Laitner, John A. ``Skip'', Stephen J. DeCanio, and Irene
Peters. 2000. ``Incorporating Behavioral, Social, and Organizational
Phenomena in the Assessment of Climate Change Mitigation Options.'' in
E. Jochem, J. Sathaye and D. Bouille, Society, Behavior, and Climate
Change Mitigation. Dordrecht, The Netherlands: Kluwer Academic Press,
pages 1-64. See also Laitner, John A. ``Skip'', Stephen J. DeCanio,
Jonathan G. Koomey, and Alan H. Sanstad, ``Room for Improvement:
Increasing the Value of Energy Modeling for Policy Analysis.''
Utilities Policy, 2003, 11, 87-94. Finally, see also, Worrell, Ernst,
Stephan Ramesohl, and Gale Boyd. 2003. ``Towards Increased Policy
Relevance in Energy Modeling,'' ACEEE 2003 Summer Study on Energy
Efficiency in Industry. Washington, DC: American Council for an Energy-
Efficient Economy.
1. How predictive is a purely economic approach to evaluating
the impact of energy policy on individual and communal
behavior? What other factors need to be considered to match
economic theory to empirical data? To what extent are such data
even available? That is, to what extent are relevant energy
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policies being evaluated for effectiveness?
2. To what extent are policies to influence individual and
community energy use being shaped by what has been learned from
research in the social sciences, including economics? Are you
aware of particular sectors of industry or government that make
more of an effort to incorporate the results of such research
into the design and evaluation of policy?
3. Please describe the purpose and scope of the first-ever
Behavior, Energy and Climate Change Conference being organized
by ACEEE. What do you hope to achieve through this conference?
How much interest have you seen from industry, government
officials, and others in a position to influence policy?
In responding as fully as I can to each of questions, let me divide
up my testimony into five parts. The first section following this
introduction provides an energy and economic context that I hope will
be helpful in responding to the Subcommittee's request. The next three
sections will deal specifically with each of the questions posed. The
last section will provide recommendations and conclusions.
Energy Consumption in Context
As one of the richest and more technologically advanced regions of
the world, the United States has expanded its economic output by three-
fold since 1970. Per capita incomes are also twice as large today
compared to incomes in 1970. Notably, however, the demand for energy
and power resources grew by less than 50 percent during the same
period.\4\ This decoupling of economic growth and energy consumption is
a function of increased energy productivity: in effect, the ability to
do more with less consumption. In today's testimony I would like to
accomplish three specific tasks as I try to answer your questions.
First, I would like to note how this decoupling has been achieved;
second, reaffirm the compelling evidence that suggests greater energy
productivity gains can be achieved--that there is, indeed, significant
room for improvement; and third, suggest that social science research
can provide policy-makers with a more satisfying set of insights that
can help our nation to capture those greater energy productivities
while maintaining our economic prosperity and enhancing overall
environmental quality. There is good news in all of this but, as we
shall see, there is work ahead.
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\4\ These and other specific energy-related data cited in the
testimony are the author's calculations as they are drawn from the
Energy Information Administration's Annual Energy Review 2006, Report
No. DOE/EIA-0384(2006), Washington, DC: U.S. Department of Energy, June
2007; and Energy Information Administration's Short-Term Energy
Outlook--August 2007, Washington, DC: U.S. Department of Energy.
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The Success of Energy Efficiency to Date
The Members of this subcommittee may be surprised to learn how big
of a role that energy efficiency has already played supporting the
growth of our economy over time. Figure 1, below, provides the
historical context of efficiency gains estimated through 2007 as they
might compare to the development of new energy supplies since 1970. In
effect, Figure 1 compares the projected level of energy consumption in
2007 to that which might have been necessary had the economy continued
to rely on 1970 technologies and market structure.\5
\\---------------------------------------------------------------------------
\5\ Strictly speaking, the term energy efficiency as used here
today can be more broadly defined as a reduction in energy intensity;
that is, a reduction in the number of Btus needed to support a dollar
of economic activity. This change results from two key drivers. This
first is a change in market structure as we move away from energy
intensive industries as a source of income to higher value-added
services. The second is what we typically think of as energy
efficiency--more efficient lighting and consumer products, greater fuel
economy in our vehicles, and more efficient power plants and industrial
processes. The United States has benefited from both economic drivers;
and both were made possible by a combination of behaviors, innovations,
and choices of technology. From a macroeconomic perspective the
evidence suggests that anything we can do that positively reduces
energy use while maintaining incomes and economic prosperity can be
termed ``energy efficiency.'' It is in that larger sense that I use the
term here today.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
In 1970 Americans consumed an estimated 68 quadrillion Btus (quads)
for all uses of energy--whether heating and cooling our homes, schools,
and businesses; powering our many industrial processes; or transporting
both people and freight to the various places they needed to go. If we
converted all forms of energy consumed in 1970 to an equivalent gallon
of gasoline per capita, it turns out that the U.S. economy required
about 2,670 gallons of gasoline equivalent for each man, woman, and
child living in the U.S. at that time. Had the United States continued
to rely on 1970 market structure and technologies to maintain its
economic growth we would today be consuming an estimated 210 quads of
energy. That would have been about 5,550 gallons of gasoline per person
equivalent. But in fact, the consumption estimated for 2007 appears to
be only slightly more than 100 quads of energy (in rounded numbers).
Again on a per capita equivalent, this means that the United States
economy requires about 2,660 gallons of gasoline per resident.
In examining these numbers more closely, several insights might pop
into mind. First, energy efficiency has allowed us to decrease the per
capita energy use, at least somewhat, compared to what we used in 1970
while still enjoying an expanded set of goods and services. Second,
instead of doubling our energy use with the expanded economy, in
effect, the gains in energy efficiency have allowed us to reduce total
energy use by the equivalent of 110 quadrillion Btus in 2007. As such,
energy efficiency has ``fueled'' roughly 77 percent of the new growth
demands in the United States since 1970. The new energy resources, on
the other hand, have provided less than one-third of the demands (or
about 32 Quads as shown in the figure).
Technology Drivers Behind Our Energy Efficiency Gains
Among the reasons for the increased energy productivity during the
past 35-40 years has been the emergence and widespread adoption of
advanced technologies, including substantial improvements in standard
consumer products, new high-tech electronics, improvements in fuel
economy, and the emergence of a variety of information and
communication technologies (ICT). A refrigerator in 1970, for example,
would have consumed on average 1,600 to 1,800 kilowatt-hours (kWh) of
electricity per year. Today, new refrigerators might require only 450
to 600 kWh--even as their volume has doubled in size. In 1970
cogeneration units that might have achieved efficiencies on the order
of 50 to 60 percent. This was still more favorable than the 32 percent
system efficiencies of our electricity grid back then, a level of
inefficiency that persists still today.\6\ Yet, cogeneration was seldom
part of a company's long-term energy plans. Their more productive
cousins--what today we call combined heat and power (CHP) plants that
can achieve overall efficiencies of 90 percent and beyond--are becoming
a critical resource in the strategic plans of many energy-intensive
industries. In 1970 I was driving a used 1957 Chevy that may have
gotten all of 20-21 miles per gallon--if that. Today I own a Toyota
Prius that perhaps averages 45 miles per gallon. And today I do more
online banking and shopping, and businesses now conduct more of their
transactions electronically--especially in the last two decades. These
and many other advanced technologies have added up to a significant
increase in overall energy productivity.
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\6\ Perhaps also of interest to the Subcommittee: what we waste
just in the production of electricity is more energy than Japan uses to
power its entire economy. We already have the technology to
substantially reduce that level of waste, however. It appears that the
real problem may lie more in understanding how to encourage the
adoption of technologies like combined heat and power or other waste-
to-energy technologies. Hence, the problem may lie more in the
dimension of social sciences than in improving our technology.
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The Social Drivers Behind Our Energy Efficiency Gains
The impressive gains in energy efficiency since 1970 are the result
of numerous innovations and choices made by both businesses and
consumers. But what are the drivers behind these innovations in
efficiency? What spurs people to choose energy-efficient technologies
and behaviors? And how much variation is there in the decision-making
process?
Among the drivers of innovation and efficiency is the increasing
level of concern about rising energy prices. However, while energy
prices comprise an important motivating factor, innovation and
efficiency have also been driven by concerns about environmental
degradation, global climate change, international energy security, and
even the lack of adequate energy and water supplies within developing
countries.
In other words, it is a varied backdrop of concerns that has
motivated action by individuals, households and companies that are
interested in solving problems. In addition to their concerns over
energy and the environment, individuals and groups also regularly
contend with concerns over earning a decent income, as well as
developing a highly profitable enterprise. But the complexity of the
process doesn't end there. A thorough understanding of motivating
factors is further complicated by the diversity of interests,
backgrounds, skills, and personalities held by would-be agents of
change. In fact, these individuals and organizations bring with them
both shared and divergent sets of interests, backgrounds and skills,
creating a kaleidoscope of shifting concerns and behavioral outcomes.
In other words, there is a wide range of corporate, group, and
individual characteristics that shape one's propensity toward energy-
saving or energy-efficient behaviors and those characteristics often
change over time; yet none of these attributes or concerns are
adequately captured in the energy prices signals and changes in incomes
that economic models typically rely on to evaluate the impacts of
energy programs or policies. Moreover, by relying on energy prices as
the primary driver of behavioral change, economic models fail to
measure and incorporate the impact of other important elements such as
consumer information pertaining to the availability of more energy-
efficient products on the market, the variety of ways of shipping a
product while generating net energy savings, or traveling to new places
for work or leisure in ways that use less energy. In short, energy
choices are not simply a function of energy prices but involve a more
complex mix of motivating factors that vary across individuals and
organizations and that shape their propensity to act.
The good news is that studies by ACEEE and others have repeatedly
shown that the United States can cost-effectively reduce energy use 25
percent or more over the next 15-20 years in ways that increase overall
productivity.\7\ Moreover, given the right choices and investments in
the many cost-effective but underutilized energy-efficient
technologies, these gains in energy productivity could provide much
needed slack in the now overly stressed energy supply markets.\8\ This,
in turn, could lessen energy price volatilities, and minimize
greenhouse gas emissions--all in ways that save additional money for
businesses and consumers. While this information is readily available,
it has not been included in most of the economic models used to
evaluate energy policies. As a result, policies based on these models
have consistently overlooked the cost-effective energy savings that can
be achieved through changing social preferences and the accelerated
adoption of energy-efficient technologies and behaviors.
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\7\ Nadel, Steven. R. Neal Elliott, and Therese Langer. 2005. A
Choice of Two Paths: Energy Savings from Pending Federal Energy
Legislation. Washington, DC: American Council for an Energy-Efficiency
Economy. See also, McKinsey Global Institute, 2007, Curbing the Global
Energy Demand Growth: The Energy Productivity Opportunity, San
Francisco, CA, McKinsey & Company. Finally, see also, ``Closing the
Efficiency Gap: Strategic Plan for Energy Efficiency Improvement in the
G8 Countries,'' 2007, Washington, DC, United Nations Foundation.
\8\ Elliott, R. Neal. 2006. America's Energy Straightjacket.
Washington, DC: American Council for an Energy-Efficient Economy.
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Economic Models, Social Preferences and Energy Policy
The Subcommittee has asked: how predictive is a purely economic
approach to evaluating the impact of energy policy? To answer this
question it might be helpful to first put this into context. For that
purpose, let me take you back to 2003 when both the U.S. Environmental
Protection Agency (EPA) and the U.S. Department of Energy's Energy
Information Administration (EIA) received a Congressional request to
evaluate a proposed climate policy that would reduce energy-related
carbon dioxide emissions by about one-third compared to levels
forecasted for the year 2025. The resulting EIA modeling analysis,
using its National Energy Modeling System (NEMS), suggested that if the
policy were adopted there would be a negative impact on investment and
household consumption, and that energy prices would rise significantly
compared to the reference case.\9\ Conversely, the EPA relied on the
Argonne National Laboratory's AMIGA Modeling System and found the
impacts to be somewhat more positive; indeed, the analysis (which
unfortunately was never publicly released) showed that there could be
small but positive increases to both investment and consumption over
time.\10
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\9\ Energy Information Administration, 2003, Analysis of S. 139,
the Climate Stewardship Act of 2003, Washington, DC, U.S. Department of
Energy.
\10\ U.S. Environmental Protection Agency, 2003, ``Preliminary
Analysis of the Climate Stewardship Act,'' Unpublished results, May 23.
The witness has direct knowledge of this modeling result as he was the
EPA project officer that undertook this analysis in cooperation with
the Argonne National Laboratory's AMIGA modeler, Donald A. Hanson.
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Three key differences perhaps explain this sharp contrast in
modeling results. First, the AMIGA modeling system tends to use a more
dynamic characterization of technology cost and performance over time.
This means that as price signals increase (for example, through a cap
and trade mechanism) and as non-price policies are implemented (by
expanding voluntary initiatives such as the ENERGY STAR programs, for
example, or by increasing performance-based standards such as the
Energy Efficiency Resource Standard and appropriating additional funds
for energy-related R&D efforts), the AMIGA modeling system tends to
show a greater improvement in technology performance that reduces the
costs and generates a higher energy bill savings. Second, the model
tracks the substitution of productive capital as it displaces less
energy-efficient technologies over time. It then translates this into a
more appropriate GDP accounting framework than the NEMS model is able
to do.\11\ Finally, AMIGA allows consumer and business preferences to
shift over time in response to various programs. For example, consumers
today might purchase a new appliance only if it pays for itself in
three years. However, an expanded set of voluntary programs might
encourage the adoption of technologies that might pay for themselves
in, say, four or five years. That greater willingness to adopt
technologies would mean a greater level of net energy savings for the
economy.\12
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\11\ In fact, AMIGA generally follows the accounting framework of
the Bureau of Economic Analysis (BEA) as it estimates quarterly GDP for
the United States. As BEA tracks changes in GDP for any given period of
time, it accounts for total household consumption, total investment,
overall government spending, and total net imports. AMIGA follows this
same accounting procedure. Hence, if there are programs and policies
that stimulate increases in more productive investment in the economy
that saves money for households and businesses, and reduces imports of
oil and natural gas, AMIGA would show those programs and policies to
provide net benefits to the U.S. economy.
\12\ Perhaps of interest to the Subcommittee, there is more
information on this topic as a result of a November 2006 national
workshop that ACEEE convened to explore a number of these critical
insights. The workshop title was ``Energy and Economic Policy Models: A
Re-examination of Some Fundamental Issues.'' For a full list of
participants and access to the papers presented there, see: http://
www.aceee.org/conf/06modeling/.
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There are two critical points to be made in answering the
Subcommittee's question in this regard. First, since the EIA report was
the only analysis that was publicly released, the persistent storyline
of negative economic impacts tended to erode public and Congressional
support for any meaningful action on either energy or climate policy in
the United States. Therefore, the most direct effect of poorly
developed economic modeling exercises on behavior has been to limit the
range of perceived opportunities for action and therefore to limit
action itself. In other words, the publication of a set of modeling
runs that relied on an inappropriate characterization of energy
productivity benefits has limited the public sense of opportunity to
act. Second, the exclusion of appropriate social variables and
technology characterizations from these models also tends to make these
options invisible during debates of possible remedies and solutions. In
other words, poorly specified models have also tended to limit policy
options to a narrow set of potential solutions predominantly focused on
increasing energy supply as opposed to policies that could increase
efficiency using social and behavioral science and existing
technologies. Integrating these important social and technological
measures into economic models can provide us with a more satisfying and
thorough review of energy and climate policy options, thereby
significantly broadening the options from which to choose.
Currently, the primary method for integrating behavior into
economic models is through what economist call ``elasticities.'' When
derived from time series data for prices and incomes as they compare to
changes in energy use over time, these values provide economists with a
measure of how energy use responds to changes in prices and incomes. As
an example, economists may determine that a 10 percent increase in
price has in the past resulted in a one percent decrease in the demand
for energy. In that case we say that the energy price elasticity is -10
percent (sometimes expressed as -0.1). On the other hand, if we
determine that a 10 percent increase in income has in the past resulted
in a three percent increase in the demand for energy, here we would say
that the energy income elasticity is +30 percent (or expressed as
+0.3).
These and other forms of elasticities are used directly or
indirectly in economic models to estimate future energy consumption
based on different policy scenarios that inevitably result in increased
energy prices whether induced by fuel taxes, cap and trade systems, or
otherwise. In short, the elasticity is a constant that is used by
economists to estimate the level of energy consumption at a variety of
different energy prices or to estimate the cost of inducing specified
amounts of energy/carbon savings. Unfortunately, this method fails to
account for non-economic programs and policies and changing preferences
among consumers and the important impact that they can have on
elasticities and consumption patterns. In other words, elasticities and
preferences are not fixed. They change over time. Figure 2 on the
following page highlights this point.
The data in Figure 2 provide annual estimates for what economists
call long-run elasticities over the period 1970 through preliminary
estimates for 2007. As opposed to monthly or quarterly changes, the so-
called long-run in this case covers the year to year changes in total
U.S. energy consumption given changing prices and per capita incomes.
The intent is not to suggest that these are actual estimates to be used
in economic policy models; the data are much too aggregate in hat
regard. But they are highly useful for our purposes here today. The
intent behind Figure 2 is to highlight the point that these values
change over time; they are not at all constant as most economic models
assume them to be.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Using one approach a modeler might determine that the income
elasticity over this period of time might be 0.60. But, in fact, the
value changes annually. In 1970 the income elasticity appears to be on
the order of 0.50, generally rising over time. By 2007 it approaches a
value of 0.70. On the other hand, the price elasticity (in absolute
terms meaning that we've dropped the negative sign) might be estimated
as 0.20 over the period of analysis shown in Figure 2. However, there
is a significantly different pattern of annual changes in price
elasticities than is shown for income elasticities. First the pattern
is much more volatile. It starts at about 0.16 (again as an absolute
value). It then bumps up and dips before reaching a peak of about 0.31
in 1982. It then slides back down to 0.17 in the year 2000. The pattern
finally closes at a significantly higher 0.24 by the end of the period.
Given the set of data highlighted in Figure 2, three points quickly
emerge. First, we've clearly confirmed that elasticities are not at all
constant. Any analysis that makes that assumption may generate biased
results. Second, the data show policy-makers that, yes, these changes
are occurring but they provide little insight into what drives these
changes; more critically, they provide little insight as to what mix of
programs and policies might provide a more reasoned or balanced
response to concerns about energy and climate change issues. Finally,
most economic models start with the presumption that prices are the
critical determinant of behavior. But the data in Figure 2 suggest
that, for the United States over this time horizon, income levels are a
greater determinant of energy use than are energy prices. This seems to
suggest that policy-makers may want to explore income-based policy
initiatives as a complement to the price signal. In other words they
might want to evaluate the extent to which incentives may induce a more
appropriate public response, or they might want to explore policies
that encourage innovations that increase energy productivity and
generate savings for the economy.\13
\\---------------------------------------------------------------------------
\13\ In fact, one recent journal article provided evidence that a
combination of programs and policies that complemented a mild price
signal actually generated a more cost-effective result than a policy
that depended on price signals alone to drive changes in total energy
consumption. Hanson, Donald A. and John A. ``Skip'' Laitner. 2004. ``An
Integrated Analysis of Policies That Increase Investments in Advanced
Energy-Efficient/Low-Carbon Technologies.'' Energy Economics, 26(4),
739-55. See especially the discussion surrounding price and non-pricing
policies as highlighted by the results in Table 4 of that article.
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The social sciences can and should contribute in at least three
ways:
1. Recognizing and Understanding Changes in Elasticities
2. Documenting and Modeling Socially-Induced Changes in Energy
Consumption
3. Documenting and Modeling the Variation in Energy
Consumption Patterns across Social Groups/ Segments
1. Recognizing and Understanding Changes in Elasticities
As we've just highlighted, most economic models now portray
elasticities as fixed. However, both Figure 2 and other
research on elasticities shows that these values change
significantly over time. The available evidence suggests that
such changes are the result of changing social structures,
preferences, values, social norms, feedback, commitment, etc.
Moreover, complex systems and patterns typically arise out of a
multiplicity of relatively simple interactions that cannot be
explained by the use of constant elasticities. But the time
series data necessary to support these kinds of assessments are
generally not available to draw precise conclusions.
2. Documenting and Modeling Socially-Induced Changes in Energy
Consumption
People respond to more than just energy prices. There is a
large body of research and literature that shows that people
may reduce their energy consumption by as much as one-third in
response to non-financial incentives, disincentives, and other
programs. Two examples highlight this point. First, in a recent
study of hotel guest behaviors, Robert Cialdini (also a witness
at this hearing) sought to increase the number of guests that
were willing to reuse their towels instead of having them
laundered on a daily basis. The study left cards in each hotel
room asking guests to reuse their towels and noted that 75
percent of people staying in the hotel had, at some point in
their stay, reused their towels. By emphasizing the behavior as
normative, Cialdini was able to lift reuse rates from 35
percent to 58 percent, saving both water and energy.\14
\\---------------------------------------------------------------------------
\14\ Cialdini, R.B. 2005. ``Basic Social Influence Is
Underestimated.'' Psychological Inquiry 16(4): 158-161.
In another study, Schultz and his colleagues used a social
norms approach to help homeowners to conserve energy. The study
involved delivering notices to household doorsteps, telling
homeowners how their energy consumption compared to the
neighborhood average. Homeowners who were consuming more
electricity than their neighbors reduced their consumption.\15
\\---------------------------------------------------------------------------
\15\ Schultz P.W., J.M. Nolan, R.B. Cialdini, N.J. Goldstein, and
V. Griskevicius. 2007. ``The Constructive, Destructive, and
Reconstructive Power of Social Norms.'' Psychological Science (May).
3. Documenting and Modeling the Variation in Energy
---------------------------------------------------------------------------
Consumption Patterns across Social Groups/Segments
Understanding variations in energy consumption patterns
across social groups and segments is critical to creating
effective policies and understanding the effect of social
dynamics on energy consumption and carbon emissions. For
example, the use of price elasticities of demand that are based
on the average consumer fail to take into account the effect of
income inequality on demand and fail to capture the ways in
which price elasticities vary across different segments of the
population over time.
People are social animals. We act in accordance to the
norms and values of the groups to which we belong. Therefore,
understanding behavioral change requires an understanding of
the ways in which membership in particular demographic groups
shape and constrain individuals' conscious and subconscious
decisions regarding energy consumption. A variety of
demographic characteristics can offer important insights into
energy consumption behavior, including those linked to age,
education, income, household status, religion, gender,
ethnicity, occupation, political affiliation, etc.
For example, recent studies on the relationship between
gasoline prices and consumption levels indicate that
elasticities associated with transportation fuel costs have
been declining.\16\ These studies create the perception that
increasing gasoline prices have little impact on
consumption.\17\ However, a study of the same relationship
across different income categories is likely to reveal a
curvilinear relationship such that both lower and higher income
groups experience low price elasticities, while middle income
groups display higher price elasticities. Low income groups
that have limited discretionary income have already reduced
their consumption to the minimum and therefore cannot respond
to price signals by reducing their consumption further, while
high income groups that have large amounts of discretionary
spending are better able to absorb the price increases without
changing consumption patterns. It is the middle income groups
that are most likely to change their consumption in response to
increasing prices of gasoline.
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\16\ Hughes, Jonathan E., Christopher R. Knittel, and Daniel
Sperling. 2006. Evidence of a Shift in the Short-Run Price Elasticity
of Gasoline Demand, Center for the Study of Energy Markets (CSEM)
Working Paper 159. Berkeley, CA: California Energy Institute,
University of California. September.
\17\ For a thorough review of the literature on elasticities, see
Dahl, Carol. 2006. Survey of Econometric Energy Demand Elasticities
Progress Report, Golden, CO: Division of Economics and Business,
Colorado School of Mines, August.
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The Role of Social Science Research on Energy Policy
When applied correctly, both non-economic and economic social
science research can provide critical insights into the most effective,
viable, and sustainable energy policies. When correctly specified,
economic models can provide policy-makers with a range of policy
scenarios and likely outcomes. When used in conjunction with economic
insights, non-economic social science research can help by: (1)
ensuring the development of appropriate technologies, (2) increasing
the adoption of existing technologies, (3) improving the effectiveness
of economic policies and forecasts, and (4) identifying non-economic
mechanisms for catalyzing the types of social change required to reduce
carbon dioxide emissions and moderate climate change.
Since the 1980s, funding for non-economic social science research
on energy consumption has declined dramatically. More funding is
clearly needed in order to expand our understanding of the social
dynamics of energy consumption, energy conservation, and energy
efficiency. By expanding this knowledge base, we could significantly
improve our capacity to reduce energy consumption via mechanisms that
are currently less well understood.
Past research on non-economic mechanisms, performed primarily in
the 1970's and 1980's, is being currently being applied in some
programs. At the national level, the ENERGY STAR program is using
research on information dissemination and labeling to improve its
information campaigns. It is also using research on the effectiveness
of social marketing strategies in its design of campaigns to increase
the adoption of energy-efficient technologies. A variety of electric
utilities have also used social science research to inform demand-side
management programs to effectively reduce energy consumption and reduce
peak load demand.
The Behavior, Energy and Climate Change Conference
Finally, the Subcommittee has asked about the upcoming Behavior,
Energy and Climate Change (BECC) Conference--scheduled for November of
this year in Sacramento, CA. We certainly invite your participation in
some capacity. This event has been organized in response to the needs
of policy-makers to better understand the energy behavior and energy-
related choices made by consumers at all levels, whether residential,
commercial, industrial, governmental, or nonprofit. The routine
activities of these energy users are the key drivers of greenhouse gas
emissions. Therefore, efforts to reduce climate impacts necessitate a
clear understanding of the social and behavioral factors that shape
choices to conserve energy or to purchase more efficient appliances,
buildings and vehicles.
Conference planning began early in 2007, when the California
Institute for Energy and Environment (CIEE), under the auspices of the
University of California System's Office of the President, brought
together a small planning group to begin to think about how to engage
policy-makers and researchers in a dialogue about the importance of
behavioral research in accelerating the pace and impacts of new climate
policies in California (and California's partner states and provinces).
Subsequent discussions led to a Behavior, Energy and Climate Change
Summit meeting in Sacramento in May of this year. At the BECC summit,
policy staff of state legislature, energy and environmental agencies,
private and public utilities, academic researchers, and private sector
representatives (50 in all) met to discuss common interests, concerns
and information needs in this area. There was broad agreement regarding
the importance of behavior and choice in understanding and affecting
climate change, and a willingness to continue the conversation and to
engage a larger group in finding ways to improve policy, enhance
program impacts, and increase the quantity of scientific research
needed to support these efforts.
An important outcome of the summit is the upcoming Behavior, Energy
and Climate Change Conference to be held November 7-9, 2007 in
Sacramento, California. CIEE has partnered with the American Council
for an Energy-Efficient Economy (ACEEE) and Stanford University's
Precourt Institute for Energy Efficiency (PIEE) in sponsoring this
meeting, which has now gained national attention and participation from
across the United States and Canada. (ACEEE has consistently provided a
venue to report behavior research related to energy use for 25 years at
its biennial Summer Study on Energy Efficiency in Buildings.\18\ PIEE
is a newly funded institute. It has behavior research as one of six
focal areas and is compiling a database of the literature.)
---------------------------------------------------------------------------
\18\ For those interested in learning more about this highly
regarded event, the 2008 Summer Study will be convened next August in
Asilomar, CA. See, http://www.aceee.org/conf/08ss/08ssindex.htm.
---------------------------------------------------------------------------
The BECC conference program includes more than 60 speakers and will
cover a broad range of topics. But a common theme is linking
knowledge--whether from scientific literatures, ongoing academic
research, energy evaluation, or program experience--to policy
development and implementation. The hoped-for results will include
increased awareness, new collaborations between researchers and
decision-makers in industry and government, a more effective mix of
policies (voluntary and regulatory), greater support for behavior-
focused research, and an acceleration of the rate and impacts of
efforts to reduce climate change in California and elsewhere. More of
the conference details, including the preliminary program agenda can be
found on the ACEEE Web site at http://www.aceee.org/conf/07becc/
07beccindex.htm. The final conference agenda, the full set of
presentations, and a conference summary document will also be available
on the web site following the conclusion of the conference.
In addition to the conference, the initial discussions also
identified the need to compile the diverse and dispersed literature on
behavior, energy and climate change to facilitate research and
encourage collaborations among policy-makers, academic researchers and
others. The Precourt Institute at Stanford is undertaking this project
and has recently developed a searchable bibliographic database of
relevant literature as well as lists of foundational readings and other
resources. The initial set of references will be available on their Web
site on September 25 at http://piee-behavior.stanford.edu. The database
will expand over time as other researchers contribute additional
literature and information, and professional profiles of researchers
involved in the area will also be added.
Conclusions and Recommendations
Based on more than 25 years of research on the role of energy
efficiency in our economy, ACEEE believes the evidence indicates a
generally less-than-satisfying performance of economic models as they
have been used to assess a variety of energy and climate-related energy
policies. By definition, national energy policy decisions, based on
erroneous or incomplete information, will lead to sub-optimal economic
and environmental outcomes. The good news in all of this is that,
despite the generally pessimistic outcomes published by many of the
conventional models, there has been a resurgence of interest in how
economics and the social sciences can inform policy, increase energy
efficiency, and reduce energy consumption. One indication of this
renewed interest is the planned Behavior, Energy and Climate Change
Conference to be held November 7-9, 2007 in Sacramento, California.
On the other hand, renewed interest does not guarantee real
results. Any real advancements in the capacity of the economics and
social science communities to contribute to more meaningful policy
insights will require targeted support from policy-makers to overcome
the current lack of research funding as well as the paucity of existing
data.
Given current circumstances, and based on the available evidence
regarding the contribution of social sciences to energy policy, ACEEE
believes three distinct recommendations are in order. First, and after
further review by this subcommittee, we believe it appropriate for the
Subcommittee to issue a set of findings that confirms our testimony. We
think it will send a positive signal to the economics and social
science communities--that there is clear room for improvement. Second,
support the development and funding of National Energy Efficiency Data
Center (NEEDC), a national nonprofit organization whose purpose will be
to collect, organize, disseminate and archive energy efficiency and
social science statistics, particularly those related to public
policies and programs.\19
\\---------------------------------------------------------------------------
\19\ For more details on this proposal, see: Horowitz, Marvin J.
2006. ``It's Time for a National Energy Efficiency Data Center,''
Arlington, VA: Demand Research; as presented to the ACEEE workshop,
``Energy and Economic Policy Models: A Re-examination of Some
Fundamental Issues, Washington, DC. The Horowitz paper and others from
this workshop can be downloaded from http://www.aceee.org/conf/
06modeling/.
---------------------------------------------------------------------------
Finally, and more critically, more research and greater research
funding are needed in order to expand our knowledge and understanding
of how human behavior and choice can increase energy efficiency, reduce
our energy dependency, and reduce our impact on the global climate.
Energy consumption is an integral part of our daily lives.
Individuals, households, businesses, industries, and organizations
consume energy in work and in leisure, 24/7. Energy heats and cools our
homes; harvests, processes and cooks our food; provides us with
transportation; powers our computers; and powers our industrial
machinery.
Energy consumption is rooted in human behavior. What is less widely
recognized is that the solutions to energy shortfalls are also rooted
in human behavior. Instead, the first and most common response is to
look to technology to provide the answers. And, when available
technologies aren't adopted, we look to the field of economics to
explain why not. Unfortunately this approach is unable to adequately
identify and address the behavioral roots of our energy problems that
extend beyond the realm of economics. Effective solutions must draw on
a broader understanding of social systems and human behavior.\20
\\---------------------------------------------------------------------------
\20\ In my own work these past several decades, and although I am
an economist, I've come to see technology as something much different
than what is characterized in the various energy and economic policy
models. This difference in the characterization of technology may
further illustrate the critical role of the social sciences in shaping
a more robust energy policy. In short, technology is not simply an
economic characterization of machines and devices, or some stylized
production function that is coded within an economic model. Rather,
I've come to view ``technology'' as the cumulative human knowledge
embedded in our nation's artifacts, equipment, and structures as they
are designed to deliver some useful or desired social outcome. A second
part of that characterization is that technology is the set of norms,
rules and criteria by which we choose to deploy that knowledge.
---------------------------------------------------------------------------
The need for a better understanding of human behavior and choice
has been repeatedly noted by the National Research Council's Panel on
Human Dimensions of Global Change, emphasizing the need for behavioral
research for effective policies that reduce emissions and mitigate
climate change.\21\ Most recently, the National Academies reported that
behavioral science has been significantly under-supported in the U.S.
Climate Change Science Program.\22\ In fact, most of the social science
work in this area has either been undertaken by lone academic
investigators or supported by progressive State government and utility
companies, particularly in California, the Pacific Northwest, and parts
of the upper Midwest and New England. The resulting academic social
science literature is scattered across the disciplines of sociology,
psychology, anthropology, and economics. It is not coherent or well-
organized. And it is difficult for policy-makers and researchers to
access--although there have been several efforts to bring these
literatures together in comprehensive reviews.\23\ The non-scientific
literatures are mainly from energy program evaluations and market
studies. They are of uneven quality. Although some of this work can be
found in public databases,\24\ much is a ``gray literature'' that is
not known to policy-makers and, in fact, not readily accessible.
---------------------------------------------------------------------------
\21\ Brewer, Garry D. and Paul C. Stern, Eds. 2005. Decision-Making
for the Environment: Social and Behavioral Science Research Priorities.
Committee on the Human Dimensions of Global Change, National Research
Council. Washington DC: National Academies Press. See also, Stern, Paul
C., Oran R. Young, and Daniel Druckman, Eds. 1991. Global Environmental
Change: Understanding the Human Dimensions. Committee on the Human
Dimensions of Global Change, National Research Council. Washington DC:
National Academies Press. Finally, see Stern, Paul C. and Elliot
Aronson, Eds. 1984. Energy Use: The Human Dimension. New York: Freeman.
\22\ Committee on Strategic Advice on the U.S. Climate Change
Science Program. 2007. Evaluating Progress of the U.S. Climate Change
Science Program: Methods and Preliminary Results. Washington DC:
National Academies Press.
\23\ For example: Schipper, Lee, Sarita Bartlett, Dianne Hawk, and
Ed Vine. 1989. ``Linking Lifestyles to Energy Use: A Matter of Time?''
Annual Review of Energy. 14, 273-318. See also, Lutzenhiser, Loren.
1993. ``Social and Behavioral Aspects of Energy Use,'' Annual Review of
Energy and the Environment. 18, 247-89. Finally, see Wilson, Charlie
and Hadi Dowlatabadi. 2007. ``Models of Decision Making and Residential
Energy Use.'' Annual Review of Environment and Resources. 32, 2.1-2.35.
\24\ California Measurement Advisory Council searchable database.
http://www.calmac.org/search.asp. See also, Consortium for Energy
Efficiency, Market Assessment and Program Evaluation Clearinghouse
searchable database http://www.cee1.org/search/search.php
---------------------------------------------------------------------------
More research and greater research funding will provide the means
to expand our knowledge and understanding of how human behavior and
choice can increase energy efficiency, reduce our energy dependency,
and reduce our impact on the global climate while still maintaining a
robust economy.
This concludes my testimony. On behalf of my colleague, Karen
Ehrhardt-Martinez, and my other associates at ACEEE, we thank you for
the opportunity to present these views. I will be happy to respond to
further questions and, of course, to provide any additional material
the Subcommittee believes will be helpful in examining this critical
topic.
Biography for John ``Skip'' Laitner
John ``Skip'' Laitner is the Senior Economist for Technology Policy
for the American Council for an Energy-Efficient Economy (ACEEE). He
previously served almost 10 years in a similar capacity for the U.S.
Environmental Protection Agency (EPA), but chose to leave the federal
service in June 2006 to focus his research on developing a more robust
analytical characterization of energy efficiency resources and
behavioral response within energy and climate policy analyses and
within economic policy models. In 1998 Skip was awarded EPA's Gold
Medal for his work with a team of other EPA economists to evaluate the
impact of different strategies that might assist in the implementation
of greenhouse gas emissions reduction policies. In 2004 his paper,
``How Far Energy Efficiency?'' catalyzed new research into the proper
characterization of efficiency as a long-term resource. Author of more
than 150 reports, journal articles, and book chapters, Skip has more
than 35 years of involvement in the environmental and energy policy
arenas. He's been invited to provide technical seminars in diverse
places as Australia, Canada, China, France, Germany, Korea, South
Africa, and Spain. He has a Master's degree in Resource Economics from
Antioch University in Yellow Springs, Ohio.
Chairman Baird. Thank you, Mr. Laitner.
Dr. Ellig.
STATEMENT OF DR. JERRY ELLIG, SENIOR RESEARCH FELLOW, MERCATUS
CENTER AT GEORGE MASON UNIVERSITY
Dr. Ellig. Chairman Baird, Ranking Member Ehlers, Members
of the Subcommittee, I would like to thank you for the
opportunity to testify today.
The Subcommittee asked in its invitation, asked me to
address three questions, and it is hard not to address those
without first saying a little bit about what I think economics
is, what it can do, what it can't do. Since I am an economist,
that is what I was asked about.
On the Social Sciences Building at the University of
Chicago is an inscription from Lord Kelvin that says if you
cannot measure, your knowledge is meager and unsatisfactory.
There is an oral tradition that the late, great economist Frank
Knight passed down through some of his students that the late,
great economist Frank Knight looked at that inscription and
said something to the effect of, yes, and after you have
expressed it in numbers your knowledge is also of a meager and
unsatisfactory sort.
The point is I think that the most important thing that
economics contributes is an understanding of principles that
help explain human behavior, not numbers, not predictions, not
even picking the stocks in the stock market, although those are
some things that economists do, but rather understanding some
fundamental principles, and that is, you know, the basis from
which I am talking today.
The first question--I will paraphrase the questions to save
time--essentially asked how predictive is a purely economic
approach and what factors other than price signals do we need
to look at to understand human behavior.
There is a syllogism that we use at the Mercatus Center
when we are teaching Congressional staff how to analyze policy,
when we are teaching students at GMU how to analyze policy. It
goes like this. It is actually very similar to something that
Mr. Baird quoted in his opening statement, that institutions in
a society create incentives and knowledge flows but then guide
human interactions that create outcomes. And we tell folks, if
you understand that, you can understand the effects of policy.
Now, it is a very broad statement, and it should be obvious
from that statement that just doing economics doesn't answer
all the questions we need to answer in order to fully
understand that. Institutions may be formal like laws and
regulations or they may be informal and more evolved like
culture and values and social norms. And there is an awful law
that economists certainly don't understand about where
institutions come from, how they evolve, how they change, which
things are durable, which things are not durable. They create
incentives and knowledge flows. Incentives may be financial or
they may be anything else that motivates people to act. So I
define incentives very broadly even though typically economists
say incentives and people think, oh, they are assuming people
only care about money. Incentive is really an understanding
about human behavior, whatever it is that motivates folks to
act. If you make it easier for folks to do something, they will
probably do more of it. If you make it harder for folks to do
something, they will probably do less of it. That is a more
general paraphrase of the economist lesson about prices.
Knowledge flows. Knowledge is not necessarily information
that can be chopped up into bits and transported. It is often
tacit which means individuals need to be able to act on
knowledge that only they have, and different institutions
enable individuals to use knowledge differently. And finally,
outcomes. Public policy, we want to influence outcomes. The
problem is the main thing that public policy directly effects
is institutions, so we have to track how the institutional
change works through knowledge and incentive flows to create
outcomes.
Now, why did I go on for a long time about this? Because it
should be fairly obvious from that description that we need a
lot more than economics to understand that. So, you know, do we
need all social sciences? You get a big amen from me out of
that.
Second question essentially asks about whether social
science is having an effect on policy? I sure hope so, and I
think we can probably all cite some very good examples, but I
have to mention that in talking to folks in federal agencies,
talking with Congressional staff and others in this town, I
also frequently hear comments like I understand what you are
saying about good public policy but you have to realize we do
stuff for other reasons than what you are talking about. And if
Congress were to more clearly signal that it is actually
interested in knowing about the actual results of policies that
are enacted, putting clauses in appropriations for example that
say this is the outcome we are trying to accomplish and this is
how much of it we expect for this appropriation, I think that
would send a positive signal that would help motivate federal
agencies to make greater use of research in both the social and
the natural sciences.
Final question asked about what kind of tools and methods
are most appropriate for understanding energy-related issues.
My short answer, all of them. My concern, if I were overseeing
federal research funding of social sciences or on a
subcommittee that oversees the agency that oversees research
funding, one of the most important questions I would ask is, is
the way we do this encouraging disciplines to use and look at a
variety of different methods or is it encouraging kind of a
tunnel vision in which each discipline says one method is the
only right way to do it? I know economists who are very closed-
minded who say that econometrics and statistics is the only way
to get empirical knowledge. I have heard somebody who is an
expert on program evaluation argue that only randomized field
studies can generate useful, empirical knowledge. It seems to
me we shouldn't be throwing out any information.
In conclusion, you would get a yes out of me if you ask,
are social sciences important? The only reason I think that we
care about energy is because of what energy allows people to
do, and so if the focus really is people, then we need social
sciences to understand how energy policy affects people.
[The prepared statement of Dr. Ellig follows:]
Prepared Statement of Jerry Ellig\1
\\---------------------------------------------------------------------------
\1\ The views expressed in this testimony are solely my own and are
not official positions of the Mercatus Center or of George Mason
University.
---------------------------------------------------------------------------
Mr. Chairman and Distinguished Members:
Thank you for the opportunity to appear here today and testify on
``The Contribution of the Social Sciences to the Energy Challenge.'' I
am a senior research fellow at the Mercatus Center, a research,
education, and outreach organization affiliated with George Mason
University and located a short Metro ride away on the Arlington,
Virginia campus. The Mercatus Center's mission is to bridge academics
and policy: we conduct interdisciplinary research in the social
sciences that integrates practice and theory. Toward that end, we have
a variety of policy-relevant research programs and also operate the
largest economics-based professional development program for
congressional staff, called Capitol Hill Campus.
My own research focuses primarily on the causes and consequences of
regulation--primarily ``economic'' regulation, including economic
regulation of energy. I am not a model-builder, but I'm a big consumer
of others' theoretical and statistical models. There's a perception in
this town that the main thing economists supply to the policy process
is numbers. When two economists disagree on the numbers, that gives
rise to jokes with punch lines like, ``You could lay all the economists
in the world end-to-end and never reach a conclusion.'' In my view, the
most important thing economists can supply to decision-makers is not
numbers, but understanding. Reasonable researchers may sometimes hold
differing views about the size of the effects of various policies, but
there's a lot more agreement among economists on basic underlying
principles that help explain human behavior in a predictable way:
people try to do the best they can with what they've got, consumers buy
less of something if the price goes up, price controls imposed on
competitive markets tend to create shortages, monopoly harms consumers,
trade makes both parties better off, individual decisions can make
society worse off if there are significant ``externalities,'' and so
forth.
I doubt you will get much disagreement from this panel on whether
the social sciences have a role in energy policy. Energy enables people
to do things they could not otherwise do, or could only do at very
great cost and inconvenience. Energy allows us to maintain and improve
our quality of life. In other words, energy should be the servant, not
the master; energy is a means of enhancing human welfare, not an end in
itself. Since the social sciences study how people interact, the social
sciences are necessary if we want to understand the effects of energy,
and energy policy, on people.
We should keep in mind both the contributions and the limits of the
social sciences; they are necessary but not sufficient to make policy
choices. Effective decision-making requires two things: knowledge of
the consequences of alternative courses of action and value judgments
that allow the decision-maker to determine which consequences are the
most desirable. Like any of the sciences, the social sciences are tools
for understanding causation--what is and what would likely happen as a
result of various policy initiatives. To decide what should be done,
decision-makers must combine the results of the analysis with value
judgments that reflect their assessment of what is worth doing. No
analytical model, no matter how complex, can automatically crank out
the ``right'' policy decision.
But just as analysis is not a substitute for judgment, values are
not a substitute for understanding reality. Values determine what
outcomes decision-makers would want to pursue, but values alone do not
provide the cause-and-effect analysis necessary to determine how those
outcomes can be accomplished most effectively. At least as important as
how options can be accomplished most effectively is the analysis of
unintended consequences. Without the firm grounding in reality provided
by social science, decision-makers are flying blind. The social
sciences, and science generally, are crucial to policy because reality
isn't optional.
The Subcommittee's invitation to testify posed three questions;
I'll take each in turn.
1. How predictive is a purely economic approach to evaluating the
impact of energy policy on individual and communal behavior? What
factors other than price signals need to be considered when developing
and applying economic models to energy-related behaviors?
Let me start with the second question first. Real policy problems
do not respect disciplinary boundaries. For this reason, it's most
useful to think of different social sciences as complementary sets of
tools for understanding reality, rather than different ways of
understanding that are in opposition to each other. In other words, we
don't need to decide whether an ``economic'' or ``psychological'' or
``sociological'' approach is the right one. Properly understood, each
is a different piece of the puzzle. All of these examine these
questions from a different perspective and provide valuable insight.
Let me put it another way, using a simple syllogism that we
frequently employ when analyzing the effects of policy in the economic
education programs the Mercatus Center runs for congressional staff:
Institutions generate both incentives and knowledge flows that shape
human interaction, and human interaction leads to outcomes. That's just
one sentence, but it requires many social sciences to understand all
the implications. Let me explain.
Institutions are the established ways of doing things. They may be
formal and explicitly enforced, such as laws and regulations, or they
may be informal, such as culture, ethics and social norms. Institutions
define the ``rules of the game''--what is considered permissible and
impermissible behavior. They also shape the way people perceive and
interpret what's going on around them.
Incentives are whatever motivate people to act. They may be
monetary or non-monetary. Cash, fame, a desire to ``do the right
thing,'' a desire to ``go along with the crowd,'' or the prospect of a
pleasant afterlife are all incentives.
Knowledge can be objective information that can be written down and
transferred. But a great deal of knowledge is highly dispersed. Much
relevant knowledge is tacit; as physical chemist and philosopher of
science Michael Polanyi put it, ``We know more than we can tell.'' \2\
Public policy can have a significant effect on the extent to which
people utilize and act on dispersed and tacit knowledge.
---------------------------------------------------------------------------
\2\ Michael Polanyi, The Tacit Dimension (1974), p. 4.
---------------------------------------------------------------------------
Outcomes are the things we actually observe people doing and the
consequences of those actions. Outcomes can be the intended effects of
a policy, or they may be unintended consequences. The policy-making
process should identify desired outcomes, identify ways of measuring
the policy's effect on those outcomes, and also identify and analyze
potential unintended consequences. Indeed, in the Government
Performance and Results Act, Congress required federal agencies to do
this for their most important strategic goals. Agencies are supposed to
articulate the major outcomes they are trying to achieve, measure
whether they have achieved them, and match outcomes with information on
resources and costs.
Returning to my one-sentence syllogism, we can start with the fact
that, although public policy ultimately seeks to influence outcomes, it
can only directly alter institutions. The fact that a policy is
intended to achieve a particular outcome does not guarantee that the
policy will achieve the outcome. Policy can only alter institutions--
mostly the formal institutions, such as laws and regulations. The
problem is, behavior does not necessarily change exactly as policy-
makers intend; many other factors come into play. The behavior of
people changes as the incentives and knowledge flows change. To
understand the effects of a policy, decision-makers need to understand
how the policy change alters knowledge flows and incentives, and how
those in turn affect both producer and consumer behavior--all the
subjects of social science research.
What's the role of economics in this big picture? Most contemporary
economics textbooks define economics as the study of how people satisfy
unlimited wants with limited resources. ``Unlimited wants'' are the
things that people value, for whatever reason. ``Limited resources''
simply means that neither individuals nor our entire society have
enough resources to get everything we can imagine we want. Whenever
people try to do the best they can with what they've got, economics
helps us understand the decisions they make.
Now let me turn to the first question: ``How predictive is a purely
economic approach to evaluating the impact of energy policy on
individual and communal behavior? Predicting what decisions people will
make requires that we know something about what specific wants people
have, what their priorities are, what possibilities they perceive, and
what resources they believe they have or can get. This is where other
social sciences enter the picture. Psychology, sociology, anthropology,
neuroscience, sociobiology, and numerous other social sciences help us
understand what people want, why they have the wants they have, how and
what opportunities they perceive, what wants and methods they regard as
``proper'' and ``improper,'' how values and wants change, which
opportunities for innovation will get noticed and acted upon, and
numerous other questions that must be answered to predict how people
will react to particular policies.
Here are a few of the many questions that economics either cannot
answer or cannot answer by itself:
<bullet> How do particular formal and informal institutions
emerge and change over time? This includes laws, culture,
ethics, norms, and other social influences that guide behavior.
<bullet> Why do many individuals follow group norms, and why
do some decline to do so?
<bullet> What factors count as incentives for individuals in
particular situations?
<bullet> How does the way people receive and process
information affect their behavior?
<bullet> How do institutions, incentives and knowledge flows
alter the ``mental models,'' heuristics, and ``rules of thumb''
that guide individual decisions?
I hope it's clear from this brief description that the relationship
between economics and other social sciences should be one of
complementarity, not conflict.
These comments on the role of economics and other social sciences
are somewhat esoteric. A few concrete examples from energy policy might
help make my meaning clearer.
One of the most basic insights of economics is that price controls
tend to create shortages when the controlled price is below the price
that would otherwise occur in the market. In the 1970s, the U.S.
imposed an extensive system of price controls on oil and gasoline. Gas
lines resulted, because there was no incentive to conserve, and no
signal that people could use to figure out how much to conserve. We had
a similar experience in the 1970s with natural gas price controls.\3
\\---------------------------------------------------------------------------
\3\ In their classic study of natural gas price controls, Stephen
Breyer and Paul MacAvoy concluded that natural gas regulation's ``major
objective--benefiting the household consumer--was not achieved. .
.regulation denied consumers gas reserves for which they would have
been willing to pay.'' The that regulation imposed on households
outweighed any benefits households received as price controls
redistributed wealth from gas producers to consumers. See Stephen
Breyer and Paul MacAvoy, Energy Regulation by the Federal Power
Commission (Brookings, 1974), pp. 86-87.
---------------------------------------------------------------------------
In recent years, oil and gasoline prices have been relatively
unregulated. When this is the case, prices send signals to consumers
and producers about the true state of the world, and those prices
change quickly with changing situations. Regulation of prices will
always distort these signals although governments have tried this
throughout history. Rent controls (held artificially low) have caused
shortages in the supply of rental housing, and minimum prices on
airline tickets increased consumer costs and caused people to take
fewer flights than they would otherwise. Today, changes in crude oil
prices caused by events anywhere in the world translate quickly into
changes in retail gasoline prices. Nobody likes paying $2.50 or $3.00
per gallon for gasoline, but the rising price of gasoline in recent
years has given consumers a message and an incentive: stay away from
the pumps unless gasoline is worth at least this much to you. So we
don't have gas lines, and nobody has to sleep in their cars to get a
good place in line even when the price of oil hits $80 per barrel, as
it did last week.
Oil and natural gas provide textbook examples of how economic
principles can provide valuable insight on the fundamental causes of
controversial policy problems. This isn't just a figure of speech; the
examples really are used in textbooks to illustrate the effects of
price controls.\4\ Note that social science examines not just consumer
behavior, but producer behavior as well. Prices send strong signals to
motivate the appropriate behavior to match supply and demand.
---------------------------------------------------------------------------
\4\ See, e.g., W. Kip Viscusi, John M. Vernon, and Joseph E.
Harrington, Jr., Economics of Regulation and Antitrust (Lexington, MA:
D.C. Heath, 1992), Ch. 18.
---------------------------------------------------------------------------
I don't think any new discoveries in the analysis of human behavior
have undermined this explanation of why we had gas lines in the 1970s
but don't have them today, or why we had natural gas service
curtailments in the 1970s but don't have them today. Price controls
encouraged us to waste gasoline and imposed tremendous human costs in
the 1970s; decontrolled prices penalize that kind of waste now. Ditto
for natural gas. And I doubt that advances in research on human
behavior would give us reason to think that the effects of price
controls on consumer and producer behavior would be qualitatively
different in the future.
Maybe the size of the effect would be different: if there's more of
a conservation ethic now and we reinstituted price controls, maybe
people wouldn't waste as much gasoline as they did in the 1970s. And if
we had gas lines again, a better understanding of what drives
individual decisions could also aid in crafting effective public-
service messages to discourage people from going to the gas station
just to top off their tanks. But I doubt any change in values or
behavioral factors would lead people to consume less gasoline as a
result of price controls that drove down the price.
I didn't mention price controls just because I wanted to discuss
the 1970s; distortions due to price controls still exist in some energy
markets today. Retail price regulation of electricity is a good
contemporary example. Most American consumers pay the same price for
electricity regardless of the time of day they choose to use it. This
increases electricity demand at peak times, and it may increase overall
demand as well. My own household is a good example of this. The
previous owner installed a washing machine and dishwasher that can be
programmed to start on a time delay, so they can run in the middle of
the night. But the power company's pricing tells us it doesn't really
matter when we run the appliances. The resulting increase in peak power
demand artificially increases resource use, electricity prices, and
environmental costs--if only because more peak-load power plants must
be built. Dynamic pricing that promotes conservation or shifting of use
to off-peak times would be a ``win-win'' for consumers and the
environment. It would reduce the likelihood of peak-load price spikes
in the bulk power market while making some new power plant construction
unnecessary. Pilot programs demonstrate that consumers--even
residential consumers--will respond to the price signals provided by
dynamic pricing.\5
\\---------------------------------------------------------------------------
\5\ Lynne Kiesling, ``Retail Electricity Deregulation: Prospects
and Challenges for Dynamic Pricing and Enabling Technologies'' (May 4,
2007), http://www.law.northwestern.edu/searlecenter/papers/
Kiesling<INF>-</INF>Annual<INF>-</INF>Rev<INF>-</INF>Final.pdf.
---------------------------------------------------------------------------
Thus far, you probably think it sounds like I'm saying that
economists already know what's important to know for energy policy, and
we can't learn anything from other social sciences. Nothing could be
further from the truth. I don't think other social sciences' research
on human behavior overturns any fundamental economic laws if we really
understand what economics has to offer. But I do think this research
can supply critical information that can help us understand how
established practices, habits, and routines change; how policy affects
behavior in situations where many people are motivated by factors other
than price; or how institutional and behavioral factors affect the size
of individuals' response to policy changes.
Dynamic electricity pricing, for example, is not being adopted very
rapidly. In her survey of dynamic pricing issues and pilot programs,
Northwestern University economist Lynne Kiesling notes a variety of
barriers. Some are formal institutions, such as the rate structures
traditionally adopted by state regulators. But she also notes that
inertia stems from what might be called cultural barriers:
The most important, yet also the most intangible and difficult
to change, obstacle to dynamic pricing and enabling
technologies is the set of incentives for inertia. The primary
stakeholders in the industry--utilities, regulators, and
customers--all have status quo bias.. . . Customer inertia is
deep because they have not had to think about their consumption
of electricity and the price they pay for it. . ..\6
\\---------------------------------------------------------------------------
\6\ Kiesling, p. 37.
The marketing of ``green'' electric power presents another
interesting and informative example. Where they have the freedom to do
so, many consumers choose to purchase green power even though it costs
more. Clearly, something other than price is important to these
consumers. If a goal of public policy is to induce people to buy more
green power, then it's important to know what factors motivate people
to buy it even though it's more expensive--and it's equally important
to know how a change in any factor, including but not limited to price,
would change the amount of green power people decide to purchase. Do
people buy green power because they want to contribute to measurable
improvements in environmental quality? Or because they want to reduce
carbon emissions? Or because it's the ``in'' thing to do and they want
to be with the crowd? Or because they want to make a statement about
their own values regardless of what everyone else is doing? The answers
to these questions probably imply very different public policy and
marketing strategies, and behavioral science can help answer these
questions.
People also make tradeoffs. If policy alters the desirability of
green power along several different dimensions in opposite directions,
then the amount purchased might go up or down. Knowing how important
the different dimensions are would help us identify whether a
particular set of policies would ultimately increase or decrease sales
of green power. Market research informed by psychology can help us find
out which other attributes of green power matter to consumers, and what
kinds of tradeoffs consumers are willing to make.
In short, I don't think new research on human behavior allows us to
discard what we know from economic analysis. The real contribution of
this research is that it helps us understand behavior in situations
where people's motivations, perceptions, and limitations were
previously not very well understood.
2. To what extent are policies to influence individual and community
energy use being shaped by what has been learned from research in the
social sciences, including economics?
This is a huge question, to which there is no simple answer. I
certainly hope we as a nation have learned something from the
experiment with price controls in the 1970s. On a smaller scale, there
are certainly examples of situations where research in economics or
other social sciences is being used either to design policies or test
their actual effects. One of the most ambitious pilot programs testing
consumer acceptance of dynamic electricity pricing, for example, is the
Olympic Peninsula GridWise Demonstration Project, led by the Pacific
Northwest National Laboratory.\7\ Federal policy seeks to encourages
dynamic pricing and other forms of ``demand response'' that reduce
electricity use at peak times.\8
\\---------------------------------------------------------------------------
\7\ Kiesling, p. 29.
\8\ See, e.g., Federal Energy Regulatory Commission, Assessment of
Demand Response & Advanced Metering, Staff Report (Sept. 2007), http://
www.ferc.gov/legal/staff-reports/09-07-demand-response.pdf.
---------------------------------------------------------------------------
However, I've also seen cause for concern. When teaching in
Mercatus Center programs for congressional staff, time and again I hear
feedback to the effect of, ``I understand what you're saying about
what's good public policy, but you have to realize we do things for
other reasons on the Hill.'' One of my favorite examples was
legislation enacted in 2003 which gave the Federal Trade Commission a
180-day deadline to enact a regulation requiring optometrists to
furnish patients with a copy of their contact lens prescriptions, but a
365-day deadline to perform a study that would help determine whether
the regulation was necessary! (I mention his not because I think this
was a bad regulation, but because the process just seems backward.)
When researchers at the Mercatus Center talk with federal agencies
about the importance of measuring their outcomes and assessing how much
of the outcome was caused by the policies they implement, we get the
distinct impression that many career agency managers doubt whether
Congress really wants to know about actual policy outcomes. In at least
one case, an agency manager told me he does not believe Congress wants
the agency to identify clear outcomes, because if specific outcomes
were identified, that would erode support for the policy!
Thus, actual practice sometimes seems to contradict the
congressional intent clearly stated in the Government Performance and
Results Act.\9\ Discovering why this happens would be an interesting
project for an interdisciplinary team of social scientists.
---------------------------------------------------------------------------
\9\ Section 3 of GPRA requires agencies to produce strategic plans
that state their missions, goals, and objectives, ``including outcome-
related goals and objectives,'' and identify program evaluations used
to reevaluate goals and objectives. A program evaluation is defined as
``an assessment, through objective measurement and systematic analysis,
of the manner and extent to which federal programs achieve intended
objectives. Section 4(b) requires agencies to produce annual
performance plans identifying measures that will be used to assess
``the relevant outputs, service levels, and outcomes of each program
activity'' and resources required to produce those results. Annual
performance reports must compare actual program performance with the
goals in the performance plan.
---------------------------------------------------------------------------
It would be helpful if lawmakers signaled their willingness to make
use of social science research--both prospectively when considering
legislation and appropriations, and retrospectively when conducting
oversight. If every piece of authorizing legislation contained a clause
stating what specific outcome or outcomes Congress expects the
legislation to achieve, that would send a clear message that
retrospective policy evaluation really matters. Another clear message
would be a clause in each appropriation indicating how much of the
outcome Congress expects the agency to achieve with the appropriation.
If some policies were explicitly enacted as experiments, perhaps with
sunset clauses and with an authorization and appropriation for
independent program evaluation, that would help as well. As it is, even
when agencies want to do program evaluation, it's often regarded as a
distraction, a burden, or something they just don't have the time and
resources to do. Building program evaluation into legislation could
help raise its priority.
3. What tools and methodologies are most appropriate for evaluating
the effectiveness of policies to incentivize consumer behavior with
respect to energy use? What kinds of basic research questions underlie
the development of such tools and methodologies?
A variety of tools and methodologies have been developed to
evaluate the effects of policy on behavior: econometrics and other
statistical techniques, surveys, field interviews, randomized field
trials, laboratory experiments, archival history, and others. One type
of laboratory experiment that consumer researchers frequently use is
one that is the social science equivalent of a clinical trial, where
consumers are given ``conditions'' that would either contain a stimulus
(something that you want to evaluate to see if it changes behavior) and
a control, without the stimulus. By varying pairs of stimuli and
controls, social scientists can uncover which policies are likely to
cause consumers to change their behavior. Practitioners of each
technique can always point to aspects that could use further
development.
But it's important that research in each discipline avoid becoming
wedded to a particular methodology as the only path to truth. I know of
economists, for example, who feel that manipulation of large data sets
is the only ``scientific'' way to do empirical research. I've heard
experts in program evaluation argue that randomized field trials are
the only accurate way to gauge the effects of policy. No doubt we could
find some social scientists with similar tunnel-vision in regard to
other research methodologies. Federal research grants can either
promote or discourage this kind of tunnel-vision, depending on what
kinds of criteria are used to select research for funding. I don't have
a specific complaint or solution in this regard, but just raise this as
an issue that should be considered.
Conclusion
Policy changes at best affect some of the knowledge flows and
incentives people face. Social science research bridges the gap between
policy and actual outcomes by examining how knowledge flows and
incentives change human behavior. Without social science, achieving the
desired outcome is really a shot in the dark. Good social science
doesn't guarantee that a policy will succeed, but it greatly raises the
odds.
Biography for Jerry Ellig
Jerry Ellig is a senior research fellow at the Mercatus Center at
George Mason University and an Adjunct Professor at the George Mason
University School of Law. Between August 2001 and August 2003, he
served as Deputy Director and Acting Director of the Office of Policy
Planning at the Federal Trade Commission. Dr. Ellig has also served as
a senior economist for the Joint Economic Committee of the U.S.
Congress and as an Assistant Professor of Economics at George Mason
University.
Dr. Ellig has published numerous articles on government regulation
and business management in both scholarly and popular periodicals,
including the Journal of Regulatory Economics, Journal of Politics,
Federal Communications Law Journal, Managerial and Decision Economics,
Business & Politics, Antitrust Bulletin, Contemporary Policy Issues,
Competitive Intelligence Review, Journal of Private Enterprise, Texas
Review of Law & Politics, Wall Street Journal, New York Times,
Barron's, and the Washington Post. His co-authored/edited books include
Dynamic Competition and Public Policy (Cambridge, 2001), Economic
Deregulation and Customer Choice (Center for Market Processes, 1997,
with Robert W. Crandall), New Horizons in Natural Gas Deregulation
(Praeger, 1996, with Joseph Kalt) and Municipal Entrepreneurship and
Energy Policy (Gordon & Breach, 1994, with Alison E. Woodward and Tom
R. Burns). He is co-author of the Mercatus Center's annual Performance
Report Scorecard, which evaluates the quality of annual performance
reports produced by federal agencies.
Dr. Ellig received his Ph.D. and M.A. in economics from George
Mason University in Fairfax, VA, and his B.A. in economics from Xavier
University in Cincinnati, OH.
Chairman Baird. Dr. Bordley.
STATEMENT OF DR. ROBERT F. BORDLEY, TECHNICAL FELLOW, VEHICLE
DEVELOPMENT RESEARCH LABORATORY, GENERAL MOTORS CORPORATION
Dr. Bordley. Chairman Baird, Dr. Ehlers, Dr. McNerney, and
all the Members of this committee and staffers, I am truly
honored to be able to present in this forum and also visit my
parents in Maryland.
I was asked three questions. The first question is about
describing the type of market research I have done at General
Motors. The first question I have looked at is estimating the
change in----
As you can see, I am not technologically fully equipped to
handle the sophistication of this committee meeting, but bear
with me.
The second area I was focused on is grouping products into
segments. You know, there is an awful lot of products out
there, small, mid-sized, large. The key question is, how do
people perceive them? How do they group products together in
their own minds? Do they group small products together, do they
group mid-sized products together? Do they group
environmentally efficient products together? How do they
actually group products together? And we want to try to look at
the way customers group them. So that is one issue. That
involved a lot of psychological work on how individuals decide
which items are similar.
We have also done a lot of--or I have also done a lot of
work about grouping customers into segments. For example,
lower-income people with large families, people who want some
style but are price-sensitive, people who want a vehicle that
convey status. You know, this draws mainly on the socioeconomic
literature about the different social classes in America, their
needs for a vehicle, if they have large families, if they need
to tow, as well as whether they view the vehicle as merely a
means of transportation, an expression of personality or
status, or something they want to enjoy. People are different.
They have different needs during their lifestyle depending upon
where they live, and that is important to understand.
Modeling demand for products as a function of all the
attributes of the product, performance, comfort, appearance,
price. Now again, this draws mainly on the economic and
statistical literature. Modeling the decision process by which
customers first become aware of a product, like how much can
advertising affect their awareness of a product? And this work
draws heavily on psychology. If you are not aware of a product,
then you can't consider buying it.
The second stage is how they come to seriously consider the
product. Given the hundreds of products available, what are the
simple criteria people use for winnowing down the set of
choices down to a manageable set of choices? Do they screen out
vehicles with a poor image for quality, a poor image for
environmental-friendliness. How do they screen them down to
their choice set? This draws on the psychological and
sociological literature on how products acquire an image and
reputation.
How do they come to shop for a vehicle? Do people visit a
lot of car dealers or a few? How much does the increased
availability of information on the internet affect the shopping
process? This is an economic/psychological question.
How did they come to buy the product? What kind of products
should a dealer have on their lot to maximize the chances of
having what the customer needs? What kinds of financial offers
are more attractive in sealing the deal? How should dealers
determine how best to approach each customer since some
customers are very detail-minded and others are more
holistically oriented. Some of these questions draw on
economics, others draw on areas of psychology that are still
being researched.
Modeling the impact of advisor recommendations on the
products customers seriously consider. Today, recommendations
come from all sorts of places, from the internet, from
Consumers Report, other magazines, auto magazines, word of
mouth. This is still an area of considerable research by
psychologists and market researchers. One of the big issues is
what sources of information do people trust? What do they rely
on in making their decision?
Understanding the differences between work practices in
different dealerships and how those different work practices
lead to better or worse dealer performance. In this kind of
problem, the dealership is often treated as a special culture
which is studied using methods adapted from cultural
anthropology, and it is been very successful.
Second question, what has social science revealed about the
factors that influence an individual's vehicle purchasing
decisions? What questions remain unanswered? Although the
developments in economic and psychological methodology on
models predicting individual choice have been central to
modeling customer demand. The economist, Douglas McFadden, was
very influential. He was awarded a Nobel Prize because of his
central role in creating many of these models. The mathematical
psychologist, Duncan Luce, received the National Medal of
Science for his role in creating the building block that led to
these models. These models are fundamental to what GM and what
other carmakers use in trying to understand the relative
importance of different attributes of customers. We also employ
direct assessment techniques for trying to assess customer
willingness to pay for attributes as well as for specific
features like OnStar. And we do clinics again based on the
research in psychology and sociology about how to do clinics.
The whole question about how the internet has reshaped the
purchasing process is currently a very active area of research
for which no one has yet developed a definitive answer. It is
profoundly changing the market. Does the internet shape
customer preferences to focus on attributes that are more
communicable on the internet, like cost and quality, versus
less communicable attributes, like vehicle styling and the
interior comfort?
I myself have not specifically looked at the issue of fuel
economy.
How are recent breakthroughs in research incorporated into
marketing or business? In what role might the NSF play? A lot
of our previous models based on economics assumed individuals
are rational. One of the real paradigm changes has been in
research in economics and psychology. The Nobel Prize-winning
work of Vernon Smith and psychologist, Daniel Kahneman as well
as Herb Simon, have strongly undermined that perspective and
suggest that individuals are systematically not rational. We
know basically how they deviate from rationality, and that is
led to a whole effort of trying to rethink how we should
understand customer behavior rigorously. And trying to
operationalize that is still ongoing. We still don't understand
that.
There are clearly some success stories in industry
collaboration. I mentioned the Edelman Prize at the at the
Institute's forum conference as an example showing successful
applications. There are some non-successes. I think it is
critical to say that NSF has been very pro-active in trying to
build bridges between the universities and academia. When I
worked at the NSF in the Decision Risk and Management Sciences
Program, I basically was concerned with a program that
explicitly kept matching grants between, you know, NSF and
industry to fund academic research. I was also involved with
administering some of NSF's small business initiation grants.
There is a lot of important bridges that NSF has built.
Obviously we can strengthen them and develop other kinds of
things. For example, one of my thoughts is we might have a
faculty in residence kind of program, you know, in different
kinds of corporations because a lot of times the questions
that, you know, industry people have aren't easy to formalize.
If you have an acknowledge scholar there, oftentimes they can
lend perspective because you really oftentimes can't
communicate your problem via an email.
Chairman Baird. Dr. Bordley, I am going to ask you to wrap
up a little early. We are going to have a vote in about 15
minutes, so in order to make sure everybody gets to ask some
level of questions, then I am going to ask you to----
Mr. Bordley. All right. That actually finishes my
testimony. A lot has been done. NSF deserves high praise for
what has been done, but a lot more could be done. Thank you.
[The prepared statement of Dr. Bordley follows:]
Prepared Statement of Robert F. Bordley
Mr. Chairman and Committee Members, thank you for the opportunity
to testify today on behalf of General Motors. I am Bob Bordley, a GM
Technical Fellow. I am working in GM R&D and Strategic Initiatives
Group. The Committee asked me to respond to the following questions:
1. Please describe the type of market research you do for GM and how
your background and experience as a social scientist influences your
work.
I have been employed at GM since 1978. My marketing research work
includes:
(1) Estimating the change in product demand given changes in product
prices. This work draws heavily on conventional economics.
(2) Grouping products into segments (e.g., small, mid-sized, etc.)
based on which products customers consider comparable. (This addresses
questions like: do people first decide they want a vehicle made by a
certain manufacturer and then shop among the available vehicles made by
the manufacturer or do they first decide they want a mid-sized vehicle
and then look across manufacturers in determining which mid-sized
products they will consider? It is based on psychological work on how
individuals decide which items are similar.
(3) Grouping customers into segments (e.g., lower income people with
large families, people who want some style but are price-sensitive,
people who are want a vehicle that conveys status, etc.) This draws
mainly on the socioeconomic literature about the different social
classes in America, their needs for a vehicle (if they have large
families or need towing capacity) as well as whether they view the
vehicle as merely a means of transportation, an expression of
personality or status, or something they want to enjoy.
(4) Modeling demand for products as a function of all the major
attributes of the product: performance, comfort, appearance, price,
etc. This draws mainly on the economic and statistical literature.
(5) Modeling the decision process by which customers
(5.1) Become aware of a product: (How much can advertising affect
awareness?) This works draws heavily on psychology.
(5.2) Come to seriously consider the product: (Given the hundreds of
products available, what are the simple criteria people use for
winnowing the set of choices down to a manageable set of choices? Do
they screen out vehicles with a poor image for quality, a poor image
for environmental-friendliness, etc.?) This draws on the psychological
and sociological literature on how products acquire an image and
reputation.
(5.3) Come to shop for a product (Do people visit a lot of dealers or
a few? How much does the increased availability of information on the
internet affect the shopping process?) This is an economic/
psychological question.
(5.4) Come to buy the product. (What kinds of products should a dealer
have on their lot to maximize the chances of having what the customer
needs? What kinds of financial offers are more attractive in sealing
the deal? How should dealers determine how best to approach each
customer since some customers are very detail-oriented, others are more
holistically oriented?) Some of these questions draw on economics,
others draw on areas of psychology that are still being researched.
(6) Modeling the impact of advisor recommendations on the products
customers seriously consider. (Recommendations come from the Internet,
consumers report and other magazines, automotive magazines, word of
mouth, etc.) This is still an area of considerable research by
psychologists and marketing researchers. What sources of information do
people trust?
(7) Understanding the differences between work practices in different
dealerships and how those different work practices lead to better or
worse dealer performance. In this kind of problem, the dealership is
often treated as a special `culture' which is studied using adaptations
of methods in cultural anthropology.
2. What has social science research revealed about factors that
influence an individual's vehicle purchasing decisions? What questions
remain unanswered? Have you looked specifically at the issue of fuel
economy?
(1) Developments in economic and psychological methodology on models
predicting individual choices and how those models can be best
estimated have been central to modeling customer demand. The economist,
McFadden, was awarded a Nobel Prize because of his central role in
creating many of these models. The mathematical psychologist, Duncan
Luce, received the National Medal of Science for his role in creating
the building block that led to McFadden's work. These models help GM
understand, for example, the relative importance of quality,
performance, roominess, fuel economy, and price in affecting a
customer's chance of buying a vehicle. We also employ direct assessment
techniques for trying to assess customer willingness to pay for these
attributes (as well as for specific features like OnStar.) Conducting
these clinics is based on methodologies developed in psychology. The
company also conducts massive surveys and, once again, psychological
theories about how questions should be asked in surveys have been very
important.
(2) The whole question of how the Internet has reshaped the purchasing
process is a very active area of current research--to which noone has
yet developed a definitive answer. Does the Internet shape customer
preferences to focus on attributes that are more communicable on the
Internet (e.g., cost and quality ratings) versus less communicable
attributes (like vehicle styling and the interior comfort of its
seats)?
(3) I myself have not specifically looked at the issue of fuel
economy.
3. How are recent breakthroughs in research incorporated into
marketing or business strategies? What role might the National Science
Foundation play in building bridges between academic social science
researchers and government and industry policy-makers?
(1) The previous models assume that individuals are rational. Research
in both economics and psychology (e.g., the Nobel-Prize winning work of
economist, Vernon Smith, and psychologist, Daniel Kahneman as well as
Herb Simon) has strongly undermined that perspective. This suggests
that the entire paradigm may potentially have to be rethought on the
basis of a psychologically sounder understanding of human behavior.
(2) There are clearly some success stories in industry/university
collaboration as well as many more stories of non-success. The fact
that a paper gets published in a journal which cites industry support
and funding for the project definitely provides no guarantee that the
research was ever used (or even looked at) by the sponsoring company.
However the Edelman competition of the Institute of Operations Research
and Management Sciences provides many examples of clearcut successes
where universities were often involved. We need to learn from these and
other success stories.
It would be wrong to say that NSF has not already built some
bridges between university and industry. The Decision Risk and
Management Sciences Program of the National Science Foundation, when I
was a program director there, had a program that was explicitly
concerned with funding research with matching support from industry.
NSF also has small business initiation grants that are explicitly
focused on trying to encouraging technology. I administered some of
those grant proposals and felt that this program was also very useful.
(This is probably also true for other NSF programs with which I am not
directly familiar.) We need to look at these existing programs,
understand both what is successful about them and what is less
successful about them, so that we can strengthen the bridges which NSF
has already tried to build.
(3) Here is another thought: We might imagine moving to a model where
a person with an endowed chair by a certain company would be committed
to physically spending a certain number of days a week on-site in that
company's location or on-site at the location of a consortium where
industry practitioners would have direct access. Currently endowed
chairs are mainly housed in universities where their occupants are more
removed from the specific needs to industry. While it's important to
have some time spent in isolation from the practical problem--in order
to think about it--it's also important to have some time spent directly
involved in the practical problem. A practical problem is frequently
not something that can be communicated from an industry person to an
academic with a short e-mail. And even when it is successfully
communicated by e-mail, the academic solution to that problem often
turns out to be too late and too complicated to address the real
practical issue. The Center for Naval Analysis used to have a program
(and might still have a program) where researchers were rotated between
the research labs to work onboard a ship in order that they retain a
real feel for the needs of industry.
So a lot has been done to build bridges and NSF deserves high
praise for its accomplishments. But there is more that could be done.
Biography for Robert F. Bordley
CAREER SUMMARY
A Dominican Lay Scholar with extensive experience in developing,
applying and managing statistical, decision analysis and operations
management models.
WORK EXPERIENCE
2007-Present, GM Technical Fellow, Operations Research Group, Warren,
MI
2006-2007, GM Technical Fellow, Vehicle Development Research
Laboratory, Warren, MI. Received Award for Best Decision
Analysis Publication. Supply Chain Design: Determined how GM's
supply chain should react if GM had a sudden need to add
production of a foreign vehicle at an existing plant (Part of
Global Flex initiative). Product Development: Quantified
Impacts of late engine changes using design structure matrix
and workload model. Reanalyzed models relating vehicle
attributes and customer attributes. Developed an alternative
approach to robust design optimization based on decision
analysis.
2003-2006, GM Technical Fellow, GM NA Product Development Center,
Warren, MI. Health Care Costs: Worked with corporate strategy
to model the drivers of GM's health care costs. Results led to
reductions in brand drug coverage, initiatives on coordination
of benefits and other efforts. Product Development: Modeled
GM's new product development process to identify sources of
cost and waste. Particularly targeted opportunities for
reducing rework. Led to initiatives focused on reducing product
content change.
GM Proving Grounds, Milford, MI. GMNA Award for Creative & Incredible
Performance in Engineering Design. Updating GM problem
remediation tools (e.g., control charts) and testing by
applying to root causes various product problems (fuel caps,
fuel pumps, rattling, ignition switches, blower motors). Using
Statistical Analysis to Properly Target Welcome Call
Initiative. Helped specify when calls would be made and the
vehicles to be emphasized.
Received 2004 Chairman's Honors Award (savings>$360M/yr) and currently
exceeding $1B.
GM Global Engineering Center, Pontiac, MI. Used influence diagrams to
identify the key drivers of GM warranty costs.
<bullet> Modeled the drivers of GM's JD Power Score. Results
led to more headcount focused on root cause analysis.
<bullet> Developed overall warranty cost driver model.
<bullet> Led team receiving 2002 GM's People Make Quality
Happen Award. (Realized savings: 250M/yr)
<bullet> Developed battery warranty cost driver model.
Potential Cost savings of $30M/yr identified. Company switched
to more heat-resistant battery design, consistent with model
recommendations. Developed models for ground warranty, brake
warranty, powertrain control modules.
Enterprise Customer Network, Detroit, MI.
<bullet> Developed model of drivers of customer loyalty to
assist in formation of GM's CRM strategy.
1998-2002, Technical Director, GM Corporate Strategy & Knowledge
Development, Detroit, MI. Provide technical support in decision
analysis and marketing to strategy formulation and operations
improvement projects.
<bullet> Validated and implemented algorithm creating current
product segmentation.
<bullet> Used statistical analysis to identify key drivers of
dealer dissatisfaction, leading to development of best
practices for improving VSSM dealer relations. Subsequent
corporate focus on these drivers improved GM's dealer
satisfaction from worst in the industry to average
<bullet> Developed marketing modules of enterprise model
commissioned by Strategy Board, including modules to value the
impact of changing the number of GM product entries and to
project GM's long-run share given current policies.
<bullet> Conducted statistical analyses supporting the design
of GM web tool, AUTOCHOICE.
<bullet> As part of a three-person team, guided the use of
CART software for revising GM's needs segmentation.
<bullet> Developed a panel on social cycles as part of
creation of New Product Concepts war room. Team received 1998
President's Council Award.
<bullet> Led successful Dialogue Decision Process projects in
technology partnering, information technology and procurement.
<bullet> Used Enterprise Miner to prove that the current needs
segmentation is more accurate than Claritas or demographic
segmentations.
<bullet> Developed a 120-page overview of the approaches used
by 60 major corporate strategists.
1993-1997, GM Vehicle Development & Technical Operations, Warren, MI.
Manager, Portfolio Planning Department. Coordinated the review
& documentation of GM's R&D projects.
<bullet> Led decision analysis on more than 50 R&D projects.
Work stimulated dramatic changes in some projects. Team
received GM Award of Excellence in 1994.
<bullet> Managed creation of a database to enable customers to
access GM R&D projects more easily.
<bullet> Managed the implementation of new project budgeting
system.
1991-1993, GM Research & Development, Warren, MI. Manager, Management &
Marketing Sciences. Managed a team of 12 R&D professionals.
<bullet> Managed development of a model prioritizing product
problems based on their impact on product repurchases.
<bullet> Developed the mathematical model that was the basis
of Pricewar, a widely used GM product pricing software package.
1990-1991, National Science Foundation, Washington, D.C. Director,
Decision, Risk & Management Science Program. Administered
review and recommended awards of grants from a $3 million
budget.
<bullet> With other grant officers, successfully lobbied for
creation of a social sciences directorate at NSF.
<bullet> Awarded first grants to industry as part of NSF's
private sector initiative.
<bullet> Successfully championed the funding of educational
grants to teach students decision-making.
<bullet> Successfully lobbied for doubling the research budget
on biotechnology social impact research.
1987-1990, Operating Sciences Department, GM Research Laboratories,
Warren, MI. Manager, Decision Support Systems. Managed a
diverse team of nine professionals in marketing, intelligence
vehicles and risk analysis.
<bullet> Managed development of first needs-based
segmentation.
<bullet> Managed development of in-vehicle navigation system.
1985-1987, GM Trilby Vehicle Design Project, Troy, MI. Supervisor,
Mission Analysis Group. Managed a four-person team developing a
mission statement for the Trilby prototype vehicle.
<bullet> Led business case analysis for proposed new vehicle.
<bullet> Developed a template specifying how the ``voice of
the customer'' could feed into vehicle engineering.
1982-1985, Societal Analysis Department, GM Research Laboratories,
Warren, MI. Staff Research Engineer. 1978-1981, Associate
Senior Research Engineer. Conducted research & consulting work
in economics, finance and environment.
<bullet> Discovered the importance of second choice data in
potentially segmenting products. This idea was central to the
development of GM's initial product segmentation.
<bullet> Developed a model of air pollution for Environmental
Activities Staff.
TEACHING EXPERIENCE
2002-present, Adjunct Professor, Industrial & Operations Engineering
Department, University of Michigan Ann Arbor, MI. Taught Course
in Decision Analysis.
2000-2002, University of Michigan, Dearborn, MI. Adjunct, Lecturer,
School of Management. Taught Courses in Operations Management.
1995-2000, Oakland University, Rochester, MI. Adjunct Full Professor,
Systems Engineering Department. Taught courses in engineering
risk analysis at Oakland University campus. Taught courses at
Vienna on behalf of Oakland University and Vienna Technical
University.
1996-1998, Wharton, Philadelphia, PA. Guest Lecturer, Marketing.
EDUCATION
2005, Sacred Heart Seminar, Detroit, MI. Master of Arts in Pastoral
Studies (summa cum laude).
1979, University of California, Berkeley, CA. Ph.D., Industrial
Engineering & Operations Research. Thesis: ``Studies in
Mathematical Group Decision Theory'' (Dr. T. Marschak). Awarded
3-Year National Science Foundation Fellowship.
1979, MBA, Finance.
1977, MS, Industrial Engineering & Operations Research.
1976, Michigan State University, Lansing, MI. MS Systems Science with
specialty in Economic Systems.
1976, BA in Public Policy. Graduated Magna cum Laude.
1975, BS, Physics. Awarded 4-Year Full Scholarship, National Merit
Scholarship.
REFEREED PUBLICATIONS
(74) ``How to Make Risky Decisions Visually.'' Visual Communication,
2007.
(73) ``Statistical Decision Making without Math.'' Chance, 2007.
(72) ``The Rosary and RCIA''. Catechumenate, 2006.
(71) ``Econophysics and Individual Choice.'' Physica A: Statistical
Mechanics and its Applications. Vol. 354. pg. 479, Elsevier,
2005.
(70) ``Multiattribute Preference Analysis with Performance Targets.''
Operations Research. (Vol.5, 6) Nov-Dec, 2004.
(69) ``Reformulating Decision Theory using Fuzzy Set Theory and
Shafer's Theory of Evidence.'' Fuzzy Sets and Systems. 139, 2
(October, 2003), 243-266.
(68) ``Determining the Appropriate Depth and Breadth of a Product
Portfolio.'' Journal of Marketing Research, Spring, 2003.
(67) ``Decision Rings: Making Decision Trees Visual & non-
Mathematical'' INFORMS Transactions on Education, 2002, Vol. 2,
No. 3, http://ite.informs.org/Vol2No3/Bordley/
(66) ``Representing Trees using Microsoft Doughnut Charts.'' American
Statistician, 56, 2, 1, 2002.
(65) ``Relating Value-Focused Thinking and Interactive Planning.''
Journal of the Operational Research Society, December, 2001.
(64) ``Foundations of Target-Based Decision Analysis.'' 2002, in
Encyclopedia of Life Support Systems, EOLSS Publishers, Oxford,
UK. www.eolss.net.
(63) ``Teaching Decision Theory in Applied Statistics Course.'' Journal
of Statistical Education, Vol. 9, #2, 2001.
(62) ``Integrating Gap Analysis and Utility Theory in Service
Research,'' Journal of Service Research, March, 2001.
(61) ``Naturalistic Decisionmaking and Prescriptive Decision Theory,''
Journal of Behavioral Decision-making, 2001.
(60) (with L. Calzi) ``Decision Analysis using Targets instead of
Utility Functions.'' Decisions in Economics and Finance. 23,
53-74, 2000.
(59) (with J. Kadane). ``Experiment-Dependent Priors in Psychology and
Physics.'' Theory & Decision. December, 1999.
(58) (with Dennis Blumenfeld and Mark Beltramo.) ``Consolidating
Distribution Centers can Reduce Lost Sales.'' International
Journal of Production Economics, 1998.
(57) ``R&D Project Generation versus R&D Project Selection.'' IEEE
Transactions in Engineering Mgt. December, 1998.
(56) ``Keeping it Sophisticatedly Simple in R&D Management.''
Engineering Economist, 1998.
(55) ``Stochastic Mechanics & Classical Mechanics with Finite
Differences.'' Journal of the Physical Society of Japan 66, 10,
1997.
(54) ``Teaching Precalculus Classical Mechanics instead of a Calculus-
Based Classical Mechanics.'' European Journal of Physics. #5,
9, 1997, pg. 327-333.
(53) ``Quantum Mechanical and Human Violations of Compound Probability
Principles: Toward a Generalized Heisenberg Uncertainty
Principle.'' Operations Research. November, 1998.
(52) ``Filling in Incomplete Survey Responses.'' Communications in
Statistics: Simulation & Computation, 26, 4, 1997.
(51) ``Experiment-Dependent Probabilities in Quantum Mechanics &
Psychology,'' Physics Essays. 10, #3, 1997.
(50) ``Discrete-time General Relativity & Hyperspace,'' in Il Nuovo
Cimento, 1997.
(49) (with Ron Harstad.) ``Lottery Qualification Auctions,'' in Bayes,
M. (ed.) Advances in Applied Micro-economics: Auctions, Volume
6, JAI Press, 1996.
(48) (with Jim McDonald, Anand Mantrala).``Something New, Something
Old: Parametric Models for the Size of Distribution of Income.
3Journal of Income Distribution, 6, 1, 1996.
(47) ``Relating Probability Amplitude Mechanics to Standard Statistical
Models.'' Physics Letters A. 204, 26-32 (1995).
(46) ``Modeling Unforseen Events with Similarity Templates Changes
Bayesian Probabilities into Pignistic Probabilities.''
International Journal of Approximate Reasoning (1995).
(45) ``Possible Convexity of the Indirect Utility Due to Nonlinear
Budget Constraints.'' Economic Letters, (1994).
(44) `` Making Social Tradeoffs Among Lives, Disabilities and Costs.''
Journal of Risk and Uncertainty, 9, 2 (1994), 135-150.
(43) ``An Overlapping Choice Set Model of Automotive Elasticities.''
Transportation Research, 28B, 6 (1994), 401-408.
(42) ``Estimating Automotive Elasticities from Segment Elasticities and
First Choice/Second Choice Data.'' Review of Economics and
Statistics. 3, August, 1993, 455-462.
(41) (with Jim McDonald). ``Estimating Aggregate Automotive Income-
Elasticities from the Population Income-Share Elasticity.''
Journal of Business and Economic Statistics, 2 (1993).
(40) ``An Intransitive Expectations-Dependent Variant of Prospect
Theory.'' Journal of Risk and Uncertainty, 5 (1992).
(39) (with G. Hazen) ``Nonlinear Utility Models Implied by Small World
Intercorrelations.'' Management Science, (1992).
(38) (with G. Hazen). ``Intertemporal Risk-Aversion and Calibration
Uncertainty May Explain Violations of the Independence Axiom.''
in J. Geweke. Decision-Making under Risk and Uncertainty: New
Models and Empirical Findings. Kluwer Academic Publishers,
London, 1992.
(37) ``The Dogit Model is Applicable even without Perfectly Captive
Buyers.'' Transportation Research, (1990).
(36) (with G. Hazen)``SSB & Weighted Linear Utility as Expected Utility
with Suspicion.'' Management Science, 4, 1990.
(35) ``Discounted Longevity as a Risk-Reduction Measure.'' Operations
Research 38, 5, (1990), 815-819.
(34) ``Relaxing the Loyalty Assumption in the Colombo/Morrison Model.''
Marketing Science, (1989).
(33) ``An Intertemporal Utility Function Concave in Gains and Convex in
Losses.'' In Annals of Operations Research (ed. By I. LaValle &
P. Fishburn, 1989).
(32) ``Fuzzy Set Theory, Observer Bias and Probability Theory.'' Fuzzy
Sets and Systems. (1989).
(31) ``Reflection as an Explanation of Bell's Inequality Violations.''
Physics Letters (1989).
(30) ``Generating Market Elasticity Estimates Using Cross-Sectional
First and Second Choice Data.'' Journal of Business and
Economic Statistics (1988).
(29) ``An Additive Group Utility for a Funds Manager.'' Management
Science, 34, 7, (1988), 835-842.
(28) ``The Energy Function in Optimal Control Theory.'' Journal of
Optimization Theory and Applications, 57, 3, 1988.
(27) ``The Cost of Delayed Lottery-Resolution.'' Operations Research,
36, 1 (1988).
(26) ``The Sum of Two Bell-Shaped Curves Can Be Sinusoidal.'' Physics
Letters (1987).
(25) ``An Intuitive Form of Non-localism for Quantum Mechanics.''
Physics Letters (1987).
(24) ``Satiation and Habit Persistence (or the Dieter's Dilemma).''
Journal of Economic Theory (1986).
(23) ``Linear Combination of Forecasts with an Intercept: A Bayesian
Approach.'' Journal of Forecasting (1986).
(22) ``One Person/One Vote is not Optimal given Information on
Factions.'' Theory and Decision (1986).
(21) ``Higher Derivatives of Velocity and Quantum Mechanics.'' Physics
Letters (1986).
(20) ``Comparing Different Decision Rules: A Simulation.'' Behavioral
Science 10 (1985).
(19) ``Using Factions to Estimate Preference Intensity: An Argument
Against One Person/One Vote.'' Public Choice 3 (1985).
(18) ``A Precise Method for Evaluating Election Schemes.'' Public
Choice 2 (1985).
(17) ``Relating Elasticities to Changes in Demand.'' Journal of
Business and Economic Statistics (Summer, 1985).
(16) ``A Model of Risky Shift.'' Organizational Behavior and Human
Performance (December, 1983).
(15) ``Deriving the Schroedinger Equation and Hamilton's Principle from
Generalized Consistency Conditions.'' International Journal of
Theoretical Physics 9 (1983).
(14) ``A Pragmatic Approach to Evaluating Election Schemes through
Simulation.'' American Political Science Review 3, (March,
1983), 123-141.
(13) ``A Central Principle of Science:Optimization.'' Behavioral
Science (January, 1983).
(12) ``A Standard (Non-Quantum) Probability Model of Quantum
Behavior.'' Journal of Mathematical Physics 9 (1983).
(11) ``The Combination of Forecasts: A Bayesian Approach.'' Journal of
the Operational Research Society (Feb., 1982).
(10) ``A Multiplicative Formula for Aggregating Probability
Estimates.'' Management Science 10 (1982).
(9) ``Deducing Warr's Power Function.'' Social Forces (September,
1982).
(8) (with Ron Wolff). ``The Aggregation of Individual Probability
Estimates. Management Science (August, 1982).
INVITED PUBLICATIONS
(7) ``The Psychology of Individual Choice.'' Proceedings of the
American Statistical Association. American Statistical
Association, Alexandria, Virginia (1993).
(6) ``Murphy's Law and Non-Informative Priors.'' in C.R. Smith (ed.)
Maximum Entropy & Bayesian Methods. Seattle, Washington, 1991.
(5) ``Bayesian Group Decision Theory.'' in B. Grofman & G. Owen.
Information Pooling and Group Decision-making. Decision
Research Series. Jai Publishers, London (1986).
(4) Book Review of `Rationality & Consensus in Science and Society.''
Nous (December, 1986).
(3) Book Review of Shapira. ``Risk-Taking: A Managerial Perspective.
Interfaces July, 1996.
(2) Book Review of Bell & Schleiffer. ``Risk-Management'' Interfaces
Sept. 1996
(1) ``Quantifying Societal Concerns in R&D Project Selection'' in M.
Shahinpoor & J. Weinrhach. Environmentally Conscious Design &
Manufacturing. ECM Press, New Mexico, 1996.
PROFESSIONAL ACTIVITIES
AMERICAN STATISTICAL ASSOCIATION
Program Chair, Section on Marketing in Statistics, American Statistical
Association, 2002-2004
General Chair, Section on Risk Analysis American Statistical
Association, 1997-99
Program Chair, Risk Analysis Section, American Statistical Association,
1996-97
Program Chair, Risk Analysis Section, American Statistical Association,
1995-96
Member, Council of Representatives(for Risk Analysis), American Stat.
Association, 1994
Member, Council of Sciences, International Society for Bayesian
Analysis, 1994-1995
Session Chair, 1987, International Society of Forecasting
Session Chair, 1989, Southern Economic Association Meeting
Program Committee, International Symposium on Automotive Technology &
Automation
Advisor on NSF Contract
INFORMS Society
Councilmember, Decision Analysis Society, 2002-2005
Chair, INFORMS Award Committee for the Teaching of Practice
Councilmember, Institute for Operations Research & Management Science
(INFORMS), 1995.
Councilmember, Operations Research Society of America (ORSA), 1994
Member, Management Sciences Roundtable (Member, Membership
Subcommittee)
Chair, Marketing Strategy Committee, Institute of Management Sciences
(TIMS), 1993-94
Co-Chair, Fall 1994 TIMS/ORSA Program Committee(Responsible for invited
papers)
Member, Meetings Committee, INFORMS, 1995
Councilmember, ORSA/TIMS Decision Analysis Section (1987-1990).
Chair, ORSA/TIMS Marketing Strategy Committee (1993-1994)
Decision Analysis Cluster Chair, 1987, 1994 TIMS/ORSA Meetings
Session Chair: 1985, 1986, 1988, 1992 TIMS/ORSA Meetings
Vice-President, Southeast Michigan Chapter of ORSA/TIMS, 1992-1995
Secretary, Southeast Michigan Chapter of ORSA/TIMS, 1987
Co-Founder, Southeast Michigan Chapter
American Marketing Association
Review Board, Journal of Marketing
Ad Hoc Reviewer, Management Science, Jr. of Academy of Mgt., Production
& Operat. Mgt. Soc., etc.
PRODUCTION & OPERATIONS MGT SOCIETY
Vice-President for Publications, Production & Operations Mgt. Society
(1999-2000)
Vice-President for Finance, Production & Operations Mgt. Society (1995-
1996)
Member, Board of Governors, Production & Operations Mgt. Society (1992-
1994)
Area Editor, Production & Operations Mgt. Journal (1993-1995)
Member, Josephy Orlicky Operations Mgt. Award Committee (1993)
GOVT. COMMITTEES
National Advisory Council on Environmental Policy--Envir. Protection
Agency
Member, Pollution Measurement Subcommittee
Chairperson, Materials Accounting Data Working Party
Member, Toxic Data Reporting Subcommittee
ALUMNI ASSOCIATIONS
James Madison College, Michigan State University
Alumni Association President, 1985-88, Boardmember, 1981-83, Vice-
President, 1984-85
Vice-Chair, James Madison College Board of Visitors, 1995-1997
Chair, Program Committee, James Madison College Board of Visitors,
1997-1998
Delivered many papers at
TIMS/ORSA, International Federation of Operations Research,
International Society of Forecasting, Public Choice, Bayesian
Research Conference, American Physical Society, Economic
Sciences & Public Choice Conference, Foundations of Utility &
Risk Conference, Judgement/Decision-making Conference, NBER-NSF
Seminar on Bayesian Inference in Econometrics & Statistics,
University of Chicago, Northwestern University, University of
Michigan, University of Arizona, University of California at
Irvine.
Ad Hoc Reviewer for
Physics Letters, IEEE Transactions, JASA, Mgt. Science, International
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Discussion
Chairman Baird. Thank you very much. Thanks to all our
witnesses. I want to welcome Dr. Roscoe Bartlett to our panel
here. Thank you very much, Dr. Bartlett. We have also been
joined by Dan Lipinski. Thanks, Dan, for being here. I am
sorry, Dr. Dan Lipinski. One of the nice things about this
committee is we actually have people who know something about
science on it which is a nice thing. Jerry McNerney is telling
me he has to leave fairly shortly, so I am going to yield my
first five minutes to Dr. McNerney. First question.
Mr. McNerney. Thank you, Mr. Chairman. I have to say, I
found your testimony very interesting and stimulating; and from
what it sounds like, we need to develop a herd mentality toward
conservation and develop strongly held beliefs. Of course this
is something that we want to move toward in bringing
conservation and good behavior about. Modeling is an important
part of that. Could you tell me, Dr. Bordley, and maybe any of
the other witnesses, what state are we at in terms of modeling
behavior of society as a whole in terms of directing behavior
towards something like more conservation behavior or attitudes?
Is that something we can get our hands around? Is that
something we need to have more funding in to get more students
involved in it or where are we with that?
Dr. Bordley. Right now, obviously we have got a lot of
modeling. For example, Nick's multi-logent models to try to
better understand customer behavior and make kinds of
decisions. We are clearly--obviously we are clearly not exactly
on the mark in predicting people's behavior as well as we would
like. You have big fluctuations, like oil price changes can
come up and dramatically change the market. I mean, you get hit
with curve balls.
So we have an awful lot of work going on in the modeling.
We are drawing on all the social sciences, and quite honestly,
we are nowhere near where we would like to be in terms of
accurate models. We are a lot better than where we were five or
seven years ago, but it is definitely an area of current
research; and we pay very close attention to the evolving
social sciences to develop better models.
Inputs to models are always a big issue and uncertainty
about inputs, too. You know, you don't understand all the
things that are driving customer behavior, what kinds of search
advisors they are looking at. So there is a lot of things that
make modeling hard as well as the proper assumptions to make
about customer behavior, which is why those realization that
customers don't follow economic rationalities to--you know, big
deal for us.
Mr. McNerney. One other question to give more time. The
modeling is an important tool, but our influence in the fed is
also an important tool. How can we make policy that would
influence the automakers and the other manufacturers to make
the right choices because they have a lot of leeway in terms of
how they direct customers? I mean, you see advertisements where
they are promoting SUV's, big vehicle purchases. How can we and
the fed influence the manufacturers to make the choices to
direct their customers toward conservation?
Dr. Bordley. Well, I guess one of the things unfortunately
is we found that as I mentioned the internet, Consumers Report,
whatever. Increasingly people are looking to information
sources outside of General Motors or the car makers in
evaluating basically what kinds of vehicles they are going to
buy. You know, Consumers Report is strongly influential,
basically. You have Kelly Blue Book, lots of sources out there.
So advertising is still a factor but it is nowhere near as
important as it used to be, and we are finding to some extent
that, you know, we are in a very competitive market. Things
have just changed so much, and so, you know----
Dr. Cialdini. Dr. McNerney, I might have an answer as well
for that question and that is in the messaging literature, in
fact, we just heard about Dr. Kahneman who won the Nobel Prize
a few years ago. His theory, a prospect theory, suggests that
if we inform an audience what they stand to lose if they fail
to move in the direction that we are suggesting, that will be
more mobilizing than telling them what they stand to gain if
they do move in that direction.
So our message to the large automobile manufacturers can be
structured and framed in terms of what stands to be lost, what
will be missed if they fail to take the action, rather than
what kinds of gains they will attain if they do.
Mr. Laitner. Dr. McNerney, if I might, I am a modeler. I
spent 10 years with the USEPA doing modeling, and I left the
agency because I think they are pursuing a very bad practice of
economic modeling. Their models tend to assume, for example,
what they call the full employment assumption. You may think it
is jobs, but to an economist that means that all resources,
whether capital, whether labor, or energy, are fully utilized
and already efficiently allocated. So along comes Congress and
wants to do something about climate or energy policy or
international security, their models by definition imply a net
cost to the economy because we are already optimal, anything we
do must impose a cost. But in fact, I think we would recognize
that there are so many inefficiencies throughout the economy
that if their models had a better ability to capture the
technologies already available to us and the behaviors that
could see a different way of doing things, a different way of
innovating, a different way of adopting technologies, you might
have a more satisfying outcome; and one of the things I think
this subcommittee could do is send a signal to the economic
modeling community and say, hey, there are better technologies
your models are not capturing. There are better behaviors that
you could be implementing and better policies than the price
signal alone you could be incorporating in your modeling
efforts, and you would see a much more satisfying end result.
As an example, finally, modelers tend to use what we call a
constant elasticity of substitution. You can imagine invariant
over time the same elasticity regardless of changes in
perception, availability of technology, changes of incomes.
That is not a very satisfying way to provide you with the kind
of policy insights you may require to know what better policies
make sense for this economy.
Chairman Baird. We see that also in health care policy,
dramatically illustrated there. Dr. Ehlers.
Mr. Ehlers. Thank you. It is fascinating to listen to this
and imagine what we could be doing. Of course, some folks would
consider this mind control. I would prefer to consider it as
unleashing the mind, getting it away from built-in prejudices.
But what I am curious, and this is for all of you, what role do
you see the Federal Government playing in changing consumer
behavior, particularly as it applies to energy usage and
dealing with the energy situation we have today? Any
suggestions, recommendations, et cetera?
Dr. Bordley. I guess I had a thought that I raised with the
Chairman beforehand which is you like to look for win-win
situations, you know, where the customer wins and the
environment wins. One of the things that people don't like is
being stuck in traffic jams, and they don't like stopping and
starting at various traffic lights. And there is a continuing
effort, you know, in traffic science, you know, this whole
business about trying to help coordinate when people leave on
trips so they avoid congestion and get to their routes more
efficiently and more effectively. It is a win-win situation.
The advent of the internet, which as I mentioned is a real big,
major deal in the car industry, allows for a lot more improved
communication and coordination between individuals that allows
them to, for example, avoid traffic jams, you know, and spend
less time at stopping lights and so on and so forth. The advent
of technologies like OnStar that allow you to communicate with
the vehicle likewise improves that. So there is an example I
think of one thing that can happen to encourage that kind of
coordination so people, you know, waste less time in traffic
jams or at stop lights and at the same time waste less fuel,
you know, win-win for all concerned using the coordination
powers of the Internet.
Mr. Ehlers. But if you succeed at that then my method won't
work. My method is to try to do what most people don't do. That
is why I come to work before most people and go home after most
people do. That is not a very popular alternative, but it
certainly gets me both ways much faster.
Dr. Bordley. That is where the social sciences really come
in because obviously if we all do the same thing, we are all
going to be in the same traffic jam. So the question is, it is
almost like auctioning, which is one of the areas of social
science, you are almost auctioning off the space, like we can
make an agreement like, for example, the Chairman leaves 10
minutes early for work, you leave on time for work, I leave 10
minutes later, we all avoid traffic jams. So some kind of
coordination. People loosely try to do that, you know, we all
leave early or whatever as far as that goes. But we can
coordinate a lot more precisely with the internet, and it will
take some social science work on auction theory about how to do
that; but that is one possibility, that technologically we have
the technology to do it but it is going to take the social
science issues to figure out how to coordinate among us so we
can collectively reduce the amount of time we are wasting and
the amount of energy as well. Does that make sense?
Mr. Ehlers. Yeah. Any other comments about the role of the
Federal Government in changing consumer behavior and energy
issues? Dr. Wegener.
Dr. Wegener. Thank you. Certainly when the Federal
Government invests in research, there are a number of ways in
which that research can make a difference in what you are
describing. Certainly investing in basic research can provide
tools to individuals like Dr. Laitner described where they have
a product but haven't brought it to market, haven't found ways
to make it work. And basic research that may be across many
different content domains, health, energy, other types of
topics, can provide tools for those companies, for those
marketers and such to take a good product and make it work in
the marketplace. Certainly the model that we use in the Energy
Center where I work as well is that in the technology
development itself, it is a different kind of perhaps research
investment and maybe for interdisciplinary teams and such
rather than the basic work, but that can help those technology
developers to identify and address on line and up front what
those public obstacles may be, and that will pay dividends down
the road in the same places. But deal with it before there is a
product and marketing after the product has been developed, but
deal with it before the obstacles are encountered.
Mr. Ehlers. Dr. Ellig.
Dr. Ellig. Two quick suggestions. One thing the Federal
Government could do it take a careful look at institutional
barriers that might be thrown up by other levels of government
in some cases. For example, if I go home and look at my
electric bill, the price that I pay for electricity tells me it
doesn't matter when I use it, whether I use the washing machine
or the dishwasher at 5:00 on a July afternoon or 2:00 in the
middle of the night in December, it doesn't matter. And there
is some significant rigidity introduced by the way electricity
has been priced in the U.S. which pretty much in many cases
discourages people from shifting their use to off-peak times
and doing things that would be energy efficient; and there are
some experiments out there, both laboratory experiments, and
experiments in the real world with real consumers that show
that when people have the opportunity to pay a price that
varies based on market conditions, they actually do alter their
behavior and move their use to off-peak times.
The other thing just thinking about the traffic issue and
having spent some time in the Federal Government in a
management position, to the extent that federal agencies can
better define what they are accomplishing in terms of outcome
for the public and then link the performance, evaluation, and
compensation of employees to that, it is easier to let people
work without much supervision which means it is easier to keep
people productive when they are telecommuting. I happen to work
for an institution where we are completely evaluated based on
what do you accomplish, not when are you in the office, how
much face time do you have with relevant people. Having been in
the Federal Government, I know that the idea that you would
evaluate people based on what they accomplished rather than
face time, time in the office, number of hours, is foreign to a
lot of folks even, and it is because of a tremendous focus on
trying to measure outputs and inputs, rather than actual
results.
Mr. Ehlers. And in many cases it is hard to measure either
one. Thank you.
Chairman Baird. Dr. Ehlers, thanks very much. We face a
somewhat similar challenge here in Congress, the issues we are
talking about, vis-a-vis trying to involve social sciences more
and the policy-making and actually gain respect for them. In
the halls of Congress when it comes to NSF funding, we have had
some interesting battles about whether social science somehow
would be a second-class citizen in NSF funding.
I am interested, Dr. Wegener--and you are in an institution
where they specifically apparently incorporated that. So my
question would be how would the physicist, the engineers, the
others interact with you? Have they come to see the value or do
they say, oh God, now we have got to go talk to those social
scientists and pretend we care. So I am interested in that, and
then I would be interested in any of your comments for how your
disciplines and the insights for your disciplines can help your
associations and those of us who care about social science can
convey to our colleagues the importance of this endeavor we are
talking about. So first, Dr. Wegener, and then open it up.
Dr. Wegener. Yes, so I deal with those issues every day now
it seems in terms of--and with mixed results I would have to
say, that for some of our scientists in other parts of the
technology development wings of our Energy Center, they
absolutely understand the need for issues like attitude change
and consumer behavior, although you might be able to predict
that some of these areas for example in the area of biofuels
where some of the technologies that are being developed would
include genetically modifying cellulosic feed stocks for
biofuels, for example, have already noted resistance from
environmental groups and others about that kind of technology.
And so they understand that there is a human, social aspect to
the technology development itself. And so they have been eager
to talk with us about those issues. You might also imagine the
folks that study nuclear power for example who know that there
are social pressures and opposition in some cases to that
technology are certainly interested to talk with us.
In some other areas, we are just not really on the map for
those scientists yet, although I have not I would say met a lot
of real resistance to talking about those issues; but I think
our successes have been varied and in some predictable ways for
technologies for which they already notice that there is that
social issues.
Dr. Cialdini. I have had success with my colleagues in the
natural and physical sciences by validating the worth of their
efforts and suggesting that what we can do is assure that those
efforts will be implemented and adopted as a consequence of the
hard work that they have done.
Mr. Laitner. If I might respond, Mr. Chairman, as an
economist and a modeler, I think the best way to begin is that
Kenneth Boldling, an American economist, once commented that
images of the future are critical to choice-oriented behavior.
If the modeling doesn't allow different images to unfold in the
way we might deploy technology, the way we might involve other
kinds of policy than a mere very high price signal, that we may
not see any kind of reaction because we are hesitant. We think
we are going to end up with nothing but a penalty. If your
model assumes that a $100 investment in a new refrigerator is a
pure cost as opposed to an investment with a return on it, you
get a whole different set of results.
So we are trying to work with sociologists and others to
understand that we can shift perception on the innovation side
and that we can shift perception on the consumer side in order
to facilitate an adoption of technology. So rather than this
idea of the constant elasticity, behavior that never changes
regardless of the size of the price, the severity of the
problem, always the same behavior, we are trying to dissolve
that and show that there are ways of incorporating different
behaviors that do result in a positive and a benefit to the
economy.
Chairman Baird. If I would apply that argument along with
the kind of comments from your colleagues to the right, that
might be the kind of argument we could try to help our
colleagues here understand, that the efficacy of the investment
in the physical, engineering, and mathematical sciences will be
enhanced not detracted from by an investment in the
corresponding social sciences. And I think that is incumbent
upon the social sciences themselves to demonstrate that in some
fashion.
Dr. Bordley. If I could also speak. I basically--I have
sort of worked from both ends. I have done most of my work in
modeling but I have also worked on the other end, you know,
where you are actually trying to put stuff together and
everything else like that. Vehicle development or--when you
take a new technology, basically trying to build a vehicle or
complex system, there is a very complex coordination system
among lots of different individuals at various kinds of levels.
You know, it is a massively complex kind of thing. Individuals
have different kinds of incentives, this whole project
management kind of thing. You are talking about thousands of
people basically, getting down to the actual guys who
basically, you know, screw on nuts or whatever, take things
apart and, you know, I have been in both worlds. And I think
that is an area, you know, technology transfer, I mean, it
involves people ultimately. We can get distracted about these
kinds of things and directional things in saying here is a
great new technology. But translating that into a product that
can actually be built, you know, cost effectively and made into
the market by real people. That is a lot of very social
science, you know, kind of interaction, very complex, and at
least--I mean, in my mind basically, that is not an area we
shun at all because that is clearly a big issue. So I think it
is a very clear area.
Chairman Baird. Dr. Ellig.
Dr. Ellig. Yeah, I think graduate education plays a big
role in how people develop attitudes toward other disciplines,
toward other tools and so forth. And so to the extent that we
can get graduate-level education for social sciences and
natural sciences to help folks appreciate, you know, the other
methods and what the other folks, the other disciplines have to
offer. There is probably a big payoff there in terms of
creating a body of people who are then predisposed to work with
scholars and other disciplines and use other methods rather
than saying, oh, we are the only ones who really understand the
world.
Chairman Baird. I appreciate that perspective. In fact the
America Competes Act, the NSF reauthorization bill that Dr.
Ehlers and I worked on does a number of things to try to
encourage interdisciplinary research. Dr. Bartlett.
Mr. Bartlett. Mr. Chairman, thank you very much for
arranging this hearing. I think that the social sciences in our
energy future will have the biggest challenges and perhaps the
most responsible position.
There are three groups that have common cause in wanting to
move from fossil fuels to alternatives. You have been
mentioning just one of those groups, and that is the group that
believes that our use of fossil fuels is increasing CO<INF>2</INF>
which is changing the climate and resulting in global warming.
There are those who will argue that if you look back through
the past you will see that the CO<INF>2</INF> increases
occurred after the global warming, therefore the result of
global warming, not the cause of global warming. There will be
others who will argue that the Earth at one time had been very
much warmer. There were, as a matter of fact, subtropical seas
in northern Siberia and the north slope of Alaska and so forth
or else there wouldn't be gas and oil there, right? There will
also be others who argue that, gee, a warmer Earth wouldn't be
all that bad. If I am living in Siberia, you would have a hard
time convincing me that a warmer Earth would be all that bad.
And so you have the problem of convincing everybody that
this is something that we need to vent our energies to because
they may argue that the Earth is warming and we have nothing to
do with it; so the Earth may be different but it won't be
necessarily worse. So it is going to be hard to marshal
everybody to follow this drummer.
The second group that has common cause in wanting to move
from fossil fuels to alternatives, the group that believes that
because we have only two percent of the world's oil and use 25
percent of the world's oil and import almost two-thirds of what
we used, that this is a totally unacceptable national security
risk and we really got to do something about that. And what you
need to do, of course, is move from fossil fuels to
alternatives so that we are less dependent on oil since we have
only two percent of it and use 25 percent of it. We need to
change that.
Not everybody will agree that this ought to be a priority
that would result in them changing their lifestyle because they
will argue, gee, we think that if we just had better dialogue
with those Arab nations, they will play nice and the guy who
has the dollars buys the oil anyhow and it really won't matter
if we don't have the oil because it is out there in the world,
and it is a global economy and we will have the oil.
There is a third group little mentioned but growing in
recognition. That is the group that believes that the energy is
just not going to be there. In 1956, M. King Hubbard predicted
the United States would peak in 1970. Right on schedule, we
peaked in 1970. By 1980, we absolutely knew we were sliding
down the other side of Hubbard's feet, and our response to that
was to drill more, totally, totally the wrong response. For the
last 30 months, oil production world wide has been--by the way,
I noticed that sir, while you were referring to EIA, please
have a lot of reserve and confidence in what EIA is telling you
there. They are a bunch of economists who are predicting that
if you understand the past you can predict the future. And they
are exactly right if our resources are infinite. They are not
infinite. In a thousand years of recorded history, we are about
150 years into the age of oil. The best evidence is that in
another 150 years, we will be through the age of oil. No more
for all practical purposes. No more oil, gas, or coal. What
kind of a world will our great, great grandchildren live in.
So you have a huge challenge, and marshalling people to do
the right thing--and I think that properly articulated, it is
undeniable that oil is not forever, that we will reach a peak
at some time. I think the evidence is pretty much overwhelming.
Conventionally, we have already reached that peak. We are now
static because we are having some unconventional oil like
Albert tar sands and really heavy sour oil that we are
exploiting today.
So absent national leadership, we don't have much energy in
this country. We have even less responsible national
leadership. Absent national leadership, what can you all do so
that we move along the right path?
Mr. Laitner. Well, Dr. Bartlett, if I might lead off, there
is a fourth group I might add to that list and that is a group
that says between now and say the year 2030, this nation will
absolutely have to invest literally trillions of dollars in new
energy supply, infrastructure, highways, buildings, and that if
we are going to have to make that investment anyway, why
wouldn't we want to ask the question, what is the smart mix of
resources that best get the job done that satisfy multiple
concerns, whether you believe in climate, whether you believe
in peak oil, or whether you have other concerns? Why wouldn't
we want to put all of our resources, energy efficiency,
nuclear, hydrogen, renewables, unconventional fossil fuels, get
them all on the table, do an honest assessment of their cost
and their performance, see which blend, not picking winners,
but generally what direction we could move in as an economy and
satisfy those concerns by then incorporating both the hard
science and the social sciences to help address that very
difficult question. We are either going to lock in a hard
future because we are not making a smart decision about the
investments today or we are going to open up opportunity for
some innovation which I said earlier in my opening remarks. We
have the means to move ourselves into a solid economic
prosperity and a sustainable path if we choose to do it, but
that requires taking the field with a full complement of
players and really addressing the issue up front.
Dr. Wegener. I am glad that Dr. Bartlett raised this issue
because certainly we have folks within our Energy Center that
are also careful to say that we are talking about a limited and
polluting resource, and that limitation is important. I do have
an economist colleague at Purdue who says, well, we will never
actually run out of oil, not because it is not limited but
because it will become so scarce, it will become so expensive
to use it people won't anymore. The problem is if we wait until
that point where the economics alone push us to do other
things, our economy will have taken so much of a hit already
that we will not want to face it. And so it is important for us
to be pro-active and to work ahead of that eventuality rather
than to wait for it.
Dr. Ellig. I think we probably have to have a big dose of
humility in speaking about how we, whether it is us experts or
lawmakers or regulators or anyone, is going to shape things to
deal with things that could happen in the future and appreciate
that there are very real limits to either what folks like us
can know or to frankly, you know, what folks you all can
accomplish through law and through regulation and so forth. And
so we should just be careful to realize that anytime one of us
says something must be done or anytime one of us says here is
what the problem is, that is reflecting not just maybe some
technical expertise but also a set of value judgments and some
assumptions about the future that may or may not be right.
Chairman Baird. Those bells you hear, those of you as
social scientists remember Pavlov's dog. We now have 15 minutes
to get to the meat. And so that means our final questioner will
be Dr. Lipinski, and I very much appreciate that and we will
finish after Dr. Lipinski and thank you very much. If people
leave now, it is because they are going to votes, not they are
being rude.
Mr. Lipinski. Thank you, Mr. Chairman. We have plenty of
time since the 15 minutes is really more than 15 minutes, but I
won't go on that long.
I want to thank Chairman Baird for holding this hearing
today. I am a social scientist. I was teaching political
science before I was elected to Congress. I also have a
background. Before that I was an engineer. I studied an
interesting program called engineering economic systems at
Stanford and had Amos Tversky as a teacher there also. So all
of the--of what you said I think is very interesting, very
important for our understanding as we here try to--if we work
on creating public policy to try to, you know, get the outcomes
that we would like to see, there are so many factors that go
into what those outcomes are going to be. There are so many
different directions I could possibly go, but let me start with
a more general question and then I want something more
specific. My first question is I know Dr. Ellig talked about
graduate-level education is so important in terms of really
teaching graduating students that interdisciplinary work is
important and it is good. I would like to know anyone who has
any--what their view is right now of how much incentive there
is right now among scholars doing social science to actually do
interdisciplinary work because certainly as a political
scientist I do not see a whole lot where I was at in my
experience. I know it differs by institution, but overall, do
you see there being that much incentive out there to do that
kind of work? Is that rewarded in any way in academe? It
certainly seems like it is rewarded out in industry. Anyone who
has any comments on that.
Mr. Laitner. Dr. Lipinski, I might open up because we have
seen that unfold with our forthcoming conference in November in
Sacramento. Apologies it may not be in your district. The
building--or the Behavioral, Energy and Climate Change
Conference that is being convened, and I have been stunned and
my colleague, Dr. Karen Earhart-Martinez with me here today,
has been even more so because she has been fielding an
incredible number of questions from a multi-disciplinary field
across all parts of the country, people really wanting to see
more of this interdisciplinary approach and incorporating the
social sciences into the thinking about energy policy. So I
might comment that convening the conference on a shoestring
budget brought forth a really unprecedented number of inquiries
and interest to see not only in terms of policy but the
question you asked, what kinds of interdisciplinary actions can
occur, and the good news is I am learning about even more I did
not know existed. I did not know about Dr. Wegener's efforts
until this testimony here today, and we are just learning about
Bob who is I am glad to say is going to be one of the speakers
at that conference in November. So the good news is it is
almost as if it is been under a pressure cooker, people just
churning and wanting to get out and be much more involved in an
interdisciplinary way but not having the means to do so, both
the funding and the connections and the infrastructure to make
that possible. But that is starting to happen, but I think you
are going to see a lot more compelling interest in that kind of
a direction.
Mr. Lipinski. Dr Ellig.
Dr. Ellig. I think at least in economics, the incentives
facing the more junior, untenured professors are still to, you
know, publish in the top journals by doing the things that
economists are normally expected to do, rather than doing a lot
of interdisciplinary stuff unless the interdisciplinary work
involves some new type of neato technical technique because
then it can get into the top journals where technique is prized
very highly. And so I think where you have seen economists
doing good interdisciplinary work is when either in unusual
cases where there is a particular academic department that
explicitly decides it is going to be different--I have to say
my colleagues at George Mason University comprise one such
department--or where there is some sort of an institution on
campus that is explicitly designed to promote this, like the
Center, Dr. Wegener is with, or you know, once you get up to
the Nobel level and other situations where more senior scholars
aren't subject to some of the more mundane incentives of their
discipline, then they have a lot more freedom to kind of, you
know, go out and follow wherever the path may lead.
Mr. Lipinski. And I am very happy to hear that we are--the
disciplines are moving in that direction but what Dr. Ellig
said, certainly it was my experience in political science in
terms of what was, as a junior scholar, valued; and I certainly
think that we need for the sake of the social sciences and, you
know, for the sake of helping our country and our world move
forward, interdisciplinary work is certainly very necessary. I
always look back, and this is a much more general factor that
influences people is the way that they are brought up, and I
always say I am a child of the '70s, grew up in the '70s, and
saving energy and the environment were very important and
showed up so much in popular culture; and as a kid I grew up
with those things. They still are with me today, and I see that
as one factor influencing my behavior; but I wish we had more
time but I think that is going to be it. But I am very
interested in all of your research in what we need to do, what
the factors are that influence people's work. It is up to the
Chairman if----
Chairman Baird. Very, very, very briefly.
Dr. Wegener. I would like to say very briefly I think that
in a lot of places that there are not the incentives that there
could be to encourage this kind of interdisciplinary work.
People are largely doing it out of their own desires rather
than incentives to bring them there. But also I think it is
really important for us to strike a difficult balance between
that interdisciplinary work but strong training in disciplines
that people can take to those interactions, and that is always
a difficult balance to find.
Chairman Baird. I want to thank our panelists. As a way to
close this, Dr. Laitner, I am going to give you one opportunity
for the shameless plug for the conference because I think it is
absolutely the perfect sequel to this hearing. Can you tell us
about the conference very briefly and location, time, and date.
Mr. Laitner. Thank you very much, Mr. Chairman. Yes, it is
a conference entitled Behavioral, Economic and Climate Change
Conference designed exactly to bring together the panoply of
disciplines, whether anthropology, sociology, psychology,
economics, a way to see what might be done to provide amore
satisfying and understanding and movement toward a prosperous
energy policy, one that addresses a number of these concerns in
Sacramento November 7th to 9th. In my testimony I do give the
URL and other information.
Chairman Baird. Terrific.
Mr. Laitner. But thank you.
Chairman Baird. What is URL?
Mr. Laitner. Uniform Resource Locator, the website.
Chairman Baird. Oh, I know that, but what is----
Mr. Laitner. We are apparently not communicating.
Chairman Baird. I know what URL means. I mean, what is the
URL for the conference?
Mr. Laitner. It is on the ACEEE website. If you go to
www.aceee.org you will find it there.
Chairman Baird. That is all right.
Mr. Laitner. Thank you.
Chairman Baird. That is pretty good. You appreciate the
normal ignorance of Members of Congress, and I can't fault you
for that. Let me thank our panelists and my colleagues for a
very interesting hearing, all of those who helped to put this
together. With that, the hearing stands adjourned, and I thank
everyone for participating.
[Whereupon, at 11:26 a.m., the Subcommittee was adjourned.]