A government subsidy to help people pay for electricity actually backfired and made them use way less power.
While economics usually predicts that lowering the price of a resource increases its use, Norwegian households cut consumption by 7-9% when subsidies kicked in. They interpreted the subsidy as a 'crisis signal' that the situation was dire, prompting them to save energy more aggressively than if the government had done nothing.
Subsidizing Crises: Evidence from Norway's Electricity Market 
SSRN · 6306923
We examine consumer responses to the 2022 European Energy Crisis, using Norway's zonal electricity market and the start of a subsidy policy as a natural experiment. Employing administrative consumption records from over 1.5 million households and a differences-indifferences approach, we show that zones more interconnected with Europe experienced a 7-9% reduction in household electricity consumption relative to zones less interconnected, with effects persisting for several months. Using a tripled