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Download fileTechnology adoption, consumer inattention and heuristic decision-making: Evidence from a UK district heating scheme
journal contribution
posted on 2018-07-17, 14:04 authored by Andrew Burlinson, Monica GiuliettiMonica Giulietti, Giuliana BattistiThis 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 PolicyVolume
47Issue
10Pages
1873 - 1886Citation
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
© ElsevierVersion
- 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
2018-06-29Publication date
2018-07-31Copyright date
2018ISSN
0048-7333Publisher version
Language
- en