Energy Efficiency Investments in the Home: Swiss Homeowners and Expectations about Future Energy Prices

Anna Alberini, Silvia Banfi () and Celine Ramseier ()
Additional contact information
Silvia Banfi: Centre for Energy Policy and Economics (CEPE), Department of Management, Technology and Economics, ETH Zurich
Celine Ramseier: Centre for Energy Policy and Economics (CEPE), Department of Management, Technology and Economics, ETH Zurich

No 11-80, CEPE Working paper series from CEPE Center for Energy Policy and Economics, ETH Zurich

Abstract: In May 2010, we surveyed 473 Swiss homeowners about their preferences for energy efficiency renovations in their homes. We used conjoint choice experiments that asked respondents to choose among hypothetical energy efficiency renovation projects. We find that homeowners are responsive to the upfront costs of the renovation projects, the savings in energy expenses, the time horizon over which such savings would be realized, and the thermal comfort improvement afforded by such renovations. Even more important, the likelihood of undertaking energy-efficiency renovations increases with the size of the subsidy offered by the Swiss federal government. At least for an average-sized project, we find that the impact of a rebate is comparable to that of an improvement in the thermal comfort of the home. The savings in the annual energy bills and the duration of the investment are less important. The discount rate implicit in the responses to the conjoint choice experiments is low. Depending on the specification of the random utility model, the discount rate ranges from 1.5 to about 3%. This is consistent with the point in Hassett and Metcalf (1993) and Metcalf and Rosenthal (1995), and with the fact that our scenarios contain no uncertainty. Respondents who feel completely uncertain about future energy prices are more likely to select the status quo (no renovations) in any given choice task and weight the cost of the investments more heavily than those respondents who expect energy prices to increase in the future. The hypothetical renovations are more likely to take place when respondents believe that climate change considerations should be an important determinant of home renovations.

Keywords: energy efficiency; energy savings; choice experiments; discount rates; residential energy use (search for similar items in EconPapers)
JEL-codes: D91 Q40 Q48 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2011-08
New Economics Papers: this item is included in nep-ene and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.cepe.ethz.ch/publications/workingPapers/CEPE_WP80.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not found UA (http://www.cepe.ethz.ch/publications/workingPapers/CEPE_WP80.pdf [301 Moved Permanently]--> https://www.cepe.ethz.ch/publications/workingPapers/CEPE_WP80.pdf [301 Moved Permanently]--> https://cepe.ethz.ch/publications/workingPapers/CEPE_WP80.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cee:wpcepe:11-80

Access Statistics for this paper

More papers in CEPE Working paper series from CEPE Center for Energy Policy and Economics, ETH Zurich Contact information at EDIRC.
Bibliographic data for series maintained by Carlos Ordas ().