Gas consumption should hurt
“Many are just burning up their summer vacation”
By Christina Lohner
10/20/2022, 5:23 p.m
So far, the Germans have been limiting their gas consumption, especially when the temperatures are mild, and the savings target still seems a long way off. Behavioral economist Christian Chlupsa explains why restricting is so difficult and what would make consumers do so.
Up to now, Germans have been saving gas mainly depending on the weather, as a study shows – adjusted for temperature, they only reduced their consumption by three percent in the first half of the year compared to the previous year. The federal government has been calling for savings for months to prevent a gas shortage. The stated goal: 20 percent. The problem: We humans know that our behavior has consequences, but these are felt to be far away. As with sport, healthy eating or alcohol, the joy of the now wins when it comes to the decision to turn up the heating, as behavioral economist Christian Chlupsa says in an interview with ntv.de. “The gas consumption should therefore hurt now.”
“We are controlled by joy and sorrow,” explains the professor from the FOM University of Economics and Management in Munich. Money obviously plays a central role here: “A study has shown that the loss of money looks exactly like a toothache on an MRI.” However, most consumers who currently turn on the heating in the bathroom in the morning – like Chlupsa himself – do not feel the “pain” of the high costs, but only the cozy warmth. After all, the utility bills will not come until next year.
“We need a direct signal,” the behavioral economist demands. The monthly deductions for gas would have to be drastically increased immediately. Similar to electricity, Chlupsa suggests: “If the providers are currently telling their customers that the electricity now costs twice as much, they are already considering whether the light has to be on all evening.”
Anyone who is already saving cannot access their own savings either. For example, if you don’t heat, although you would like to, you are saving, but you don’t know how much money you are saving. Thus, neither a negative feedback – the high costs – nor a positive one – I save a certain amount or sum – reaches the consumer. The economist explains that only direct feedback leads to quick action. Like driving a car: if you start to skid, you quickly realize that you have to react; on long journeys, on the other hand, drivers would find it difficult to judge for themselves exactly how long they need or whether a coffee break is necessary.
New TV becomes affordable
Another obstacle to saving gas: Chlupsa believes that there needs to be greater awareness of the problem of an impending gas shortage and the exploding costs. Since people tick very visually, pictures would help. “Nobody can grasp percentages, we need bills for average households: If you behave like this, it will cost you 1000 euros, for example – that means you won’t be able to go on vacation next year or even pay your bills anymore. Or in a positive way turned: You can afford a new TV if you save energy.”
Christian Chlupsa
(Photo: Christian Vogel)
Consumers can find model calculations in numerous media reports, among other things, “but a large part of the population is pretty uninformed,” says Chlupsa. No wonder, the professor thinks: Even before the invention of social networks, people lived in constant sensory overload – now even more so. Consumers are in a “continuous fire”: “First Corona, then the Ukraine war, and something changes every day.”
Politics sends “economically totally wrong signal”
Therefore, in his eyes, it is not enough to bring the problem into the news. According to the former advertiser, a large-scale campaign would be necessary. Celebrities and other people would have to be shown – believably – with the “pain” that gas consumption triggers in them. In order to spread the message, social networks are very important, but so are advertisements on posters, in local public transport and on municipal vehicles such as garbage trucks. “It costs less than the consequences of excessive gas consumption,” says the economist. Such a campaign must not only come quickly, but also be up to date – in contrast to the one for vaccination against Corona. In the case of unsuccessful campaigns, the problem is usually not the service providers who developed them, but that decision-makers lack the courage. “Then it just has to crack,” says Chlupsa.
Instead, politicians are sending the “totally wrong economic signal,” says the behavioral economist. As is so often the case, politicians make decisions in order not to make themselves unpopular and not to trigger hysteria. Chancellor Olaf Scholz wants to keep energy prices down to an “acceptable level,” as he has just reiterated. On the contrary, according to Chlupsa, the signal should not be that everything will be half as bad, but that pressure should be built up at the moment. “Only when it hurts do we react quickly if we want the pain to go away.” Homeowners who currently have to fill up their heating oil tank are certainly more concerned about the high energy costs than gas customers.
On the other hand, people deal with pain in the future in a sporty way, as Chlupsa puts it. For example, it has been clear for decades that the German pension system, unlike in other countries such as Austria or Switzerland, does not work. But every new government is reluctant to tackle the problem. Most of those affected also know that they eat unhealthily, for example, or put too little money aside for the future – but the currywurst or the new dress are just more tempting. According to the economist, this behavior is particularly pronounced in finance. “Many are just burning up their summer vacation.”
“Saving important for social peace”
Chlupsa therefore considers not only the planned gas price brake to be counterproductive, but also statements by the federal government that Germany will probably get through the winter well given well-stocked gas storage facilities. Because in order to prevent a lack of gas, consumers have to save significantly, even if the calculations of scientists for this 20 percent – if there are enough LNG imports via the new terminals – by up to 30 percent.
In a recent survey, three quarters of those questioned stated that they cut back on heating. However, Chlupsa suspects that they also answered this out of social desirability. If they were asked whether they have friends who don’t save energy, for example, the answers would be different – or if they were asked about their specific savings measures.
Nevertheless, the behavioral economist is not pessimistic: “If you show people, as in other areas, that saving gas is important for social peace, they save too.” After all, humans are social beings, most of them donate, for example, and provide first aid. Chlupsa: “We have to make saving a cult.”