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Journal of Cleaner Production
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Journal of Cleaner Production
Article . 2018 . Peer-reviewed
License: Elsevier TDM
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Article . 2018
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Apollo
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How present bias forestalls energy efficiency upgrades: A study of household appliance purchases in India

Authors: Fuerst, Franz; Singh, Ramandeep;

How present bias forestalls energy efficiency upgrades: A study of household appliance purchases in India

Abstract

This paper investigates household decision-making behaviour in the market for energy-efficient lighting and appliances in Delhi, India to study the energy efficiency gap using the inter-disciplinary framework of behavioural economics. A primary dataset of survey responses and choice experiments is analysed to test whether under-investment in energy-efficient technologies is explained by present-biased preferences. A ‘Multiple Price List’ set is employed to compute the standard discount factor, and the present bias and long-run component of a quasi-hyperbolic specification. Individuals who are more patient and less present-biased are found to be more likely to invest in certain energy-efficient appliances. As expected, time preferences are relevant for larger purchases such as refrigerators but lose some or all of their explanatory power for inexpensive purchases such as light bulbs. Our quantitative study contributes to the existing literature, which is limited to qualitatively identifying the (market failure) barriers for energy efficiency; inter alia, it tests for behavioural failures in individuals' decision-making towards the environment.

Country
United Kingdom
Related Organizations
Keywords

energy efficiency gap, inter-temporal choice, present bias

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citations
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
32
Top 10%
Top 10%
Top 10%
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