Risk preferences and purchase of energy-efficient technologies in the residential sector

Yueming Qiu, Gregory Colson and Carola Grebitus ()

Ecological Economics, 2014, vol. 107, issue C, 216-229

Abstract: Perceived risk in future energy cost savings of energy efficient technologies has been well identified as a major barrier to the adoption of such technologies. However, direct empirical evidence of the impact of consumer risk aversion on the adoption of energy efficient technologies has been limited. In this paper, we elicit consumer risk preferences using a multiple price list experiment tailored to household energy decisions. We then use the elicited risk preferences to explain consumers' self-reported historical purchase of energy efficient appliances and installation of energy efficiency retrofitting technologies. Using data from 432 homeowners from Arizona and California, USA, results show that more risk averse consumers are less likely to adopt energy efficient technologies (except for the case of energy efficient air-conditioners). In addition, the findings provide evidence that households' perceived mobility as measured by the probability of moving within five years, can amplify the negative impact of risk aversion on the adoption of energy efficiency retrofitting technologies. Overall, the results provide implications for policy makers and companies involved in promoting energy efficient technologies.

Keywords: Appliances; Energy efficiency; Home energy improvements; Retrofit; Risk preferences (search for similar items in EconPapers)
JEL-codes: C91 D12 Q29 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (95)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:107:y:2014:i:c:p:216-229

DOI: 10.1016/j.ecolecon.2014.09.002

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