Understanding households’ investment behaviour
A large survey of 1,500 to 2,000 households each in 8 EU member states (FR, DE, IT, PL, RO, ES, SE, UK – a total of 15,000 households) was carried out in July/August 2016. This representative survey provided deeper insights into households’ investment behaviour and attitudes concerning energy efficiency investments in their homes.
The aim of the study was to understand the role of the factors behind Implicit Discount Rates (IDRs) for energy efficient technology adoption [LINK TO DISCOUNT RATES PAGES],. Realising that the factors behind IDRs are typically blurred and fractional, BRISKEE also provides a comprehensive framework for understanding the underlying factors of the IDR for household adoption of energy efficient technologies. This understanding can be used to design better policies that lower the implicit discount rates, and it was used for more accurate energy-demand and macro-economic modelling.
At the micro level, the BRISKEE project has shown whichof the factors conceptually underlying the implicit discount rates are empirically related with the adoption of various energy efficiency technologies (EET).
The survey also provides information on how the factors underlying the implicit discount rate such as risk and time preferences (including also present bias and loss aversion), environmental preferences, social norms or external barriers to energy efficiency(e.g. lack of capital) are related with individual and household characteristics. The survey is unique in many ways: BRISKEE allows for a much larger sample than previous studies, and findings are demographically representative. It is the first multi-country study to jointly explore the effects of time and risk preferences on energy technology adoption, thereby also considering present bias and loss aversion. It also developed a comprehensive conceptual framework, which relates the implicit discount rates to its underlying factors. This framework also helps clarifying the role of policy interventions.
For the end-use technologies in (see figure), participants were asked to rate the nine decision criteria regarding their importance in their most recent purchase decision on a five-point scale ranging from “played no role” (numerical value 1) to “very important” (numerical value 5).
- For appliances, technical performance is found to be the most important criterion for purchase decisions, followed closely by purchase price, energy cost and energy label.
- For lighting, energy cost is found to be the most important criterion, closely followed by performance and energy label. As opposed to appliance purchases, the purchase price does not play such an important role for lighting.
- For buildings,performance, energy costs, indoor comfort and investment costs are the most relevant criteria.
For all technologies (appliances, lighting and building technologies), there is a set of criteria that are clearly less important: recommendations by professionals, financial support measures as well as recommendations by friends and family.
Detailed results on the factors underlying the implicit discount rate such as risk and time preferences, environmental preferences, social norms or barriers to energy efficiency are found in Deliverable 2.4 Determinants of Household Preferences Underlying the Implicit Discount Rate: Findings from Representative Surveys in Eight EU Countries. http://www.briskee-cheetah.eu/library-and-reports/determinants-of-household-preferences-underlying-the-implicit-discount-rate-findings-from-representative-surveys-in-eight-eu-countries/
Schleich, J., Gassmann, X., Faure, C. Meissner, T. (2016): Making the Implicit Explicit: A Look inside the Implicit Discount Rate. Energy Policy 97, 321-331. http://dx.doi.org/10.1016/j.enpol.2016.07.044