Heterogeneous preferences and investments in energy saving measures

We investigate whether risk, time, environmental, and social preferences affect single-family homeowners' investments in the energy efficiency of their house using established experimental measures and questionnaires. We find that homeowners who report to be more risk taking are more likely to have renovated their house. Pro-environmental and future-oriented renovators, i.e. renovators with lower discount factors, live in homes with higher energy efficiency. Pro-social preferences as measured in a dictator game relates positively to the energy quality of renovated houses. Controlling for the energy efficiency of houses, we further find that energy consumption as measured by heating and electricity costs is lower for future-oriented and pro-environmental individuals. (C) 2020 Elsevier B.V. All rights reserved.

Automated summary

We investigate the impact of risk, time, environmental, and social preferences on single-family homeowners' investments in energy efficiency. Homeowners who are more risk taking are more likely to renovate their house, and those with pro-environmental and future-oriented attitudes tend to live in more energy-efficient homes. Pro-social preferences are also positively related to the energy quality of renovated houses.