Energy-Related Financial Literacy and Fuel Efficiency: Evidence from Motorcycles in Nepal

54 Pages Posted: 29 Feb 2024

See all articles by Suchita Srinivasan

Suchita Srinivasan

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

Naveen Adhikari

Tribhuvan University

max Filippini

affiliation not provided to SSRN

Nilkanth Kumar

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich; Centre for Energy Policy and Economics (CEPE) at ETH Zurich

Nirmal Kumar Raut

Tribhuvan University

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Abstract

Air pollution is a grave problem in urban areas of developing countries, with the transport sector often being a significant contributor. A gamut of behavioral anomalies and market failures have been known to inhibit individuals from investing in more fuelefficient vehicles (due to the well-known ‘energy efficiency gap’). For example, low levels of knowledge and skills to calculate the lifetime costs of a durable may induce underinvestment in energy-efficiency. This level of knowledge and skills has been encapsulated in the idea of ‘energy-related financial literacy’ (ERFL). In this study, we use novel data from Kathmandu, Nepal to understand the determinants of ERFL, and to evaluate its effect on the energy efficiency gap in the choice of motorcycles. Our results provide suggestive evidence that individuals with higher levels of ERFL are more likely to own motorcycles that have comparatively low total lifetime costs, i.e., more fuel-efficient motorcycles, especially individuals with stronger computational skills. This study has important implications for the design of relatively low-cost policies such as educational programs that may nudge buyers to invest in energy efficiency.

Keywords: Energy-related financial literacy, fuel efficiency, Energy efficiency gap, Motorcycles, Nepal

Suggested Citation

Srinivasan, Suchita and Adhikari, Naveen and Filippini, max and Kumar, Nilkanth and Raut, Nirmal Kumar, Energy-Related Financial Literacy and Fuel Efficiency: Evidence from Motorcycles in Nepal. Available at SSRN: https://ssrn.com/abstract=4743266 or http://dx.doi.org/10.2139/ssrn.4743266

Suchita Srinivasan (Contact Author)

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

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Naveen Adhikari

Tribhuvan University ( email )

Kirtipur
Kathmandu, 44600
Nepal

Max Filippini

affiliation not provided to SSRN

Nilkanth Kumar

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

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Centre for Energy Policy and Economics (CEPE) at ETH Zurich ( email )

8092 Zurich
Switzerland

HOME PAGE: http://www.cepe.ethz.ch/

Nirmal Kumar Raut

Tribhuvan University ( email )

Kirtipur
Kathmandu, Bagmati 44600
Nepal

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