20180518 BGB No names Revision Final.pdf (464.41 kB)
Download file

Technology adoption, consumer inattention and heuristic decision-making: Evidence from a UK district heating scheme

Download (464.41 kB)
journal contribution
posted on 17.07.2018, 14:04 authored by Andrew Burlinson, Monica GiuliettiMonica Giulietti, Giuliana Battisti
This paper contributes to the debate on the energy efficiency paradox according to which consumers fail to adopt cost-effective, energy efficient technologies over less efficient technologies and therefore fail to reduce energy consumption. Both traditional and behavioural theories are used to investigate the decision-making process of residential consumers with empirical evidence based upon a specially designed quasi-experimental survey of 784 households on the decision to connect to a district-heating system, a more energy efficient alternative to individual heating systems. The results suggest an internal discount rate of around 36 per cent for homeowners, a signal that consumers undervalue future energy costs. We also find the household’s decision to be negatively affected by years of payback up to around 7-8 years. Our findings suggest that neglecting consumer inattention and heuristics can lead to biases which cast doubt on the existence of the energy efficiency paradox. We believe that these results help to explain why some consumers are unlikely to invest in energy efficient technology, particularly those on low incomes.

Funding

We acknowledge the financial support from Western Power Distribution as part of the FlexDGrid project and from the EPSRC (grants EP/N001745/1, EPR062258/1 and EP/K002228) and UKERC funding (grant FF3/3).

History

School

  • Business and Economics

Department

  • Economics

Published in

Research Policy

Volume

47

Issue

10

Pages

1873 - 1886

Citation

BURLINSON, A., GIULIETTI, M. and BATTISTI, G., 2018. Technology adoption, consumer inattention and heuristic decision-making: Evidence from a UK district heating scheme. Research Policy, 47 (10), pp.1873-1886.

Publisher

© Elsevier

Version

AM (Accepted Manuscript)

Publisher statement

This paper was accepted for publication in the journal Research Policy and the definitive published version is available at https://doi.org/10.1016/j.respol.2018.06.017.

Acceptance date

29/06/2018

Publication date

2018-07-31

Copyright date

2018

ISSN

0048-7333

Language

en