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

Yueming Qiu, Gregory Colson, Carola Grebitus

Research output: Contribution to journalArticle

35 Citations (Scopus)

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.

Original languageEnglish (US)
Pages (from-to)216-229
Number of pages14
JournalEcological Economics
Volume107
DOIs
StatePublished - Nov 1 2014

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energy
energy efficiency
household energy
homeowner
purchase
Energy
Purchase
Risk preferences
savings
air
cost
experiment
retrofitting
Household
Energy efficiency
Risk aversion
Consumer risk

Keywords

  • Appliances
  • Energy efficiency
  • Home energy improvements
  • Retrofit
  • Risk preferences

ASJC Scopus subject areas

  • Economics and Econometrics
  • Environmental Science(all)

Cite this

Risk preferences and purchase of energy-efficient technologies in the residential sector. / Qiu, Yueming; Colson, Gregory; Grebitus, Carola.

In: Ecological Economics, Vol. 107, 01.11.2014, p. 216-229.

Research output: Contribution to journalArticle

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