Empower the Consumer! Energy-Related Financial Literacy and its Socioeconomic Determinants

CER-ETH – Center of Economic Research at ETH Zurich, Working Paper 18/289, May 2018

29 Pages Posted: 22 May 2018

See all articles by Julia Blasch

Julia Blasch

Centre for Energy Policy and Economics

Nina Boogen

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Claudio Daminato

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Massimo Filippini

ETH Zürich; University of Lugano - Faculty of Economics

Date Written: May 9, 2018

Abstract

To be aware of the potential for energy savings in their homes, individuals need specific energy-related and financial knowledge. In addition, they also need the cognitive skills to apply this knowledge, for example when it comes to the calculation of the lifetime cost of household appliances or energy-efficient renovations. This set of knowledge and skills is related to two literacy concepts, i.e. energy and financial literacy. In this paper, we propose a new concept of literacy that we call “energy-related financial literacy”. Further, we present information on the level of financial literacy as well as on the level of energy-related financial literacy for a sample of European households. In the empirical part of the paper we estimate several ordered probit models in order to analyse the determinants of the level of energy-related financial literacy, with a particular interest to understanding the role of gender. Our results show that the level of energy-related financial literacy is relatively low and heterogeneous across the European countries. Moreover, the results confirm previous findings about the gender gap in financial literacy, with males being associated with higher levels of the index. We also identify such a gender gap for energy-related financial literacy.

Keywords: energy literacy, financial literacy, energy-related financial literacy, consumer awareness, energy knowledge

JEL Classification: D12, D91, Q40

Suggested Citation

Blasch, Julia and Boogen, Nina and Daminato, Claudio and Filippini, Massimo, Empower the Consumer! Energy-Related Financial Literacy and its Socioeconomic Determinants (May 9, 2018). CER-ETH – Center of Economic Research at ETH Zurich, Working Paper 18/289, May 2018 . Available at SSRN: https://ssrn.com/abstract=3175874 or http://dx.doi.org/10.2139/ssrn.3175874

Julia Blasch

Centre for Energy Policy and Economics ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Nina Boogen (Contact Author)

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Claudio Daminato

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Massimo Filippini

ETH Zürich ( email )

ETH-Zentrum
CH-8092 Zurich
Switzerland

University of Lugano - Faculty of Economics ( email )

Via Giuseppe Buffi 13
CH-6900 Lugano, CH-6904
Switzerland

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