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Behavioral Anomalies and Energy-related Individual Choices: The Role of Status-quo Bias

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  • Julia Blasch
  • Claudio Daminato
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 also reflected in the total electricity consumption, which is found to be around 6% 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.

Suggested Citation

  • Julia Blasch & Claudio Daminato, 2020. "Behavioral Anomalies and Energy-related Individual Choices: The Role of Status-quo Bias," The Energy Journal, , vol. 41(6), pages 181-214, November.
    • Handle: RePEc:sae:enejou:v:41:y:2020:i:6:p:181-214
    DOI: 10.5547/01956574.41.6.jbla
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    References listed on IDEAS

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    1. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    2. Qiu, Yueming & Colson, Gregory & Grebitus, Carola, 2014. "Risk preferences and purchase of energy-efficient technologies in the residential sector," Ecological Economics, Elsevier, vol. 107(C), pages 216-229.
    3. Bruderer Enzler, Heidi & Diekmann, Andreas & Meyer, Reto, 2014. "Subjective discount rates in the general population and their predictive power for energy saving behavior," Energy Policy, Elsevier, vol. 65(C), pages 524-540.
    4. Schleich, Joachim & Gassmann, Xavier & Meissner, Thomas & Faure, Corinne, 2019. "A large-scale test of the effects of time discounting, risk aversion, loss aversion, and present bias on household adoption of energy-efficient technologies," Energy Economics, Elsevier, vol. 80(C), pages 377-393.
    5. Schleich, Joachim & Gassmann, Xavier & Faure, Corinne & Meissner, Thomas, 2016. "Making the implicit explicit: A look inside the implicit discount rate," Energy Policy, Elsevier, vol. 97(C), pages 321-331.
    6. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-571, March.
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    Cited by:

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    3. Barokas, Guy & Ling, Hila Hindy & Sherman, Arie & Shavit, Tal, 2024. "To change or not to change? – Status quo bias and happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 656-671.

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