Nudging the poor and the rich – A field study on the distributional effects of green electricity defaults

Choice defaults are an increasingly popular public policy tool. Yet there is little knowledge of the distributional consequences of such nudges for different groups in society. We report results from an elicitation study in the residential electricity market in Switzerland in which we contrast consumers' actual contract choices under an existing default regime with the same consumers' active choices in a survey presenting the same choice-set without any default. We find that the default is successful at curbing greenhouse gas emissions, but it leads poorer households to pay more for their electricity consumption than they would want to, while leaving a significant willingness to pay for green electricity by richer households untapped. •Field study on distributional consequences of green electricity default•Poorer households fail to switch to preferred greyer, cheaper options.•Richer households fail to switch to preferred greener, more expensive options.•Preference match of the default not granted•Green default acts like a tax on the poor.