Moral Licensing in the Swedish Green Energy Market

Sammanfattning: Moral licensing is a relatively new notion in social psychology and behavioral economics. A handful of experimental studies have shown that people who act in a way that is perceived to be morally meritorious, license themselves to refrain from such moral behavior in the future and may instead undertake immoral actions. The purpose of this study is to examine whether such effects are at play in the Swedish green energy market. We first develop a formal theoretical model that describes moral licensing in relation to energy consumption. We then use difference-in-difference regressions to highlight empirically whether there are differences in energy consumption between customers with standard energy contracts, and customers who switch to a green energy contract. Our results do not show any long-term consumption effects from switching from a standard to a green energy contract.