Lebanon Electricity
Executive Summary: To speed up household payment of electricity bills, a randomized controlled trial conducted on 429 households, using hassle factor, social norm and national pride nudges, with all 3 outperforming control group, with 4%, 13% and 15% improvement respectively, proving cost-effective and small changes in context through behaviorally-driven slips can increase probability of paying bills.
Challenge and Nudge Solution: Procrastination is common problem people encounter in different daily situations such as payment of bills. Triggering certain contextual cues can help overcome statusquo/ inertia bias as well as reduce procrastination. Salience, loss aversion, social norm, priming and ego are behavioral tools that can be used to change people’s behavior and increase payment of bills.
Control Group: Bills for previous period to be collected within 40 days of their issuance date. Collectors required to visit their assigned subscribers, a maximum of two times, but end up in practice doing more than two visits within forty-day period. During first visit, collectors deliver bills to subscribers and offer them chance to pay right away. A minority does pay right away, and those who do not pay during the first visit, receive a paper note stating the amount to be paid and the proposed date of the second visit. If payment is still not done on second visit, subscribers are required, in principle, to pay in a local branch office where they will be charged a 6,000 L.L fine for late payment, and defaulting on three consecutive bill payments results in electricity suspension.
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