IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Prepress Content: The following article is a preprint of a scientific paper that has completed the peer-review process and been accepted for publication within The Energy Journal.

While the International Association for Energy Economics (IAEE) makes every effort to ensure the veracity of the material and the accuracy of the data therein, IAEE is not responsible for the citing of this content until the article is actually printed in a final version of The Energy Journal. For example, preprinted articles are often moved from issue to issue affecting page numbers, and actual volume and issue numbers. Care should be given when citing Energy Journal preprint articles.

The Role of Uncertainty in Shaping Individual Preferences for Residential Energy Renovation Decisions

Abstract:
This article examines a crucial question that has been raised in recent years in both policy and economic literature: the role of uncertainty as a barrier to energy retrofit decisions. We develop a discrete choice experiment to elicit preferences for energy renovation measures. This methodologically innovative experiment design includes two insurance schemes covering potential sources of uncertainty as attributes of the energy retrofit alternatives. We use a mixed logit model to investigate the nature of systematic heterogeneity in household preferences for attributes of energy retrofit solutions. The article shows that uncertainties related to future energy pricing and retrofit quality are negatively perceived during energy-renovation decision making. This impact varies according to household characteristics such as risk aversion and perceptions of the economic context. The results suggest that public policies should support and accompany the development of insurance schemes to increase energy renovation rates.

Download Executive Summary Purchase ( $25 )

Keywords: Stated preference method, Discrete choice experiment, Energy efficiency gap, Decision under uncertainty, Energy retrofit decision, Mixed logit model

DOI: 10.5547/01956574.43.4.sbak

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 43, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

© 2022 International Association for Energy Economics | Privacy Policy | Return Policy