A large-scale test of the effects of time discounting, risk aversion, loss aversion, and present bias on household adoption of energy-efficient technologies

Joachim Schleich, Xavier Gassmann, Thomas Meissner and Corinne Faure

Energy Economics, 2019, vol. 80, issue C, 377-393

Abstract: This paper empirically and jointly analyses the relations between standard time discounting, risk aversion, loss aversion, and present bias and household stated adoption of low to high stake energy efficiency technologies (EETs): light emitting diodes (LEDs), energy-efficient appliances, and retrofit measures. The analysis relies on a large representative sample drawn from eight European Union countries. Preferences over time, risk, and losses were elicited and jointly estimated from participant choices in incentivized, context-free multiple price list experiments. The findings from econometrically estimating EET adoption equations provide some support for the hypothesis that individuals who are more loss-averse, or more risk-averse, or who exhibit a lower time discount factor are less likely to have adopted EETs. Yet, some of the results (significance levels and effect sizes) appeared sensitive to the addition of covariates, which may be an indication of bad controls. Finally, omitting one or several of the parameters capturing preferences over time, risk, and losses when estimating the EET adoption equations, did not appear to cause omitted variable bias.

Keywords: Time discounting; Risk aversion; Loss aversion present bias; Energy efficiency; Adoption (search for similar items in EconPapers)
JEL-codes: D23 D81 Q41 Q48 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (77)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988318305000
Full text for ScienceDirect subscribers only

Related works:
Working Paper: A large-scale test of the effects of time discounting, risk aversion, loss aversion and present bias on household adoption of energy efficient technologies (2018)
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:eee:eneeco:v:80:y:2019:i:c:p:377-393

DOI: 10.1016/j.eneco.2018.12.018

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().