Behavioral Anomalies and Energy-Related Individual Choices: The Role of Status-Quo Bias

29 Pages Posted: 15 Dec 2018

See all articles by Julia Blasch

Julia Blasch

Vrije Universiteit Amsterdam - Institute for Environmental Studies (IVM)

Claudio Daminato

Lund University; ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Date Written: November 9, 2018

Abstract

The literature on the energy-efficiency gap discusses the status-quo bias as a behavioral anomaly that potentially increases a household’s energy consumption. We empirically investigate the extent to which the status-quo bias is linked to residential electricity consumption through two channels: non-replacement of old appliances and overuse of appliances. Using data from a large household survey conducted in three European countries, we find that our measure of status-quo bias is a significant predictor of both the age of home appliances and the level of a household’s consumption of energy services. This is reflected in the total electricity consumption, which is found to be around 5.7% higher when the household head is status-quo biased. We thus provide empirical evidence that the status-quo bias may represent a substantial barrier to increasing residential energy efficiency. Our findings prompt policy makers to design instruments that take this barrier into account.

Keywords: status-quo bias, loss aversion, appliances replacement, energy efficiency, residential energy consumption, energy-related financial literacy

JEL Classification: D12, D91, Q41, Q50

Suggested Citation

Blasch, Julia and Daminato, Claudio, Behavioral Anomalies and Energy-Related Individual Choices: The Role of Status-Quo Bias (November 9, 2018). Available at SSRN: https://ssrn.com/abstract=3289624 or http://dx.doi.org/10.2139/ssrn.3289624

Julia Blasch

Vrije Universiteit Amsterdam - Institute for Environmental Studies (IVM) ( email )

De Boelelaan 1087
Amsterdam, 1081HV
Netherlands

Claudio Daminato (Contact Author)

Lund University ( email )

Box 117
Lund, SC Skane S221 00
Sweden

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

Zürichbergstrasse 18
Zurich, 8092
Switzerland

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