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The influence of risk perception on energy efficiency investments: Evidence from a German survey

Sebastian Rockstuhl, Simon Wenninger, Christian Wiethe and Jakob Ahlrichs

Energy Policy, 2022, vol. 167, issue C

Abstract: Energy efficiency investments are typically based on either one of two opposing perspectives on financial risk. This study conducted a choice experiment based on a simulated online shop for energetic retrofitting. Here, the resulting financial risk of retrofitting was presented in different treatment groups from these two perspectives. In this vein, participants in the first treatment group were confronted with the resulting risk of deviating energy bill savings (investment risk perspective), which increases with the investment. In the second treatment group, participants were confronted with resulting risk of deviating energy bills after the investment (energy bill risk perspective), which decreases with investment. In the third treatment group, we displayed risk from both perspectives. We found that participants deciding on retrofitting measures within the online shop displaying energy bill risk invested about 20% more than participants in an online shop displaying the investment risk, tested for significance. These findings establish a new way of nudging individuals towards energy efficiency investments, which is especially important for energy policymakers. We, therefore, recommended actively leveraging the risk-reducing potential under the energy bill perspective when promoting energy efficiency investments.

Keywords: Nudging; Energy efficiency; Decision-making; Retrofitting; Choice experiment (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.enpol.2022.113033

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