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Decision-making in electrical appliance use in the home

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  • Yamamoto, Yoshihiro
  • Suzuki, Akihiko
  • Fuwa, Yasuhiro
  • Sato, Tomohiro
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    Abstract

    This paper presents the results of a survey as well as an argument from the viewpoint of behavioral economics with the aim of clarifying how consumers make decisions about electrical appliance use in the home. A survey of consumers showed that most have little awareness of the energy efficiency of appliances, the price of the services produced by electrical appliances, or electricity rates. These findings indicate that price does not function as a signal in electricity consumption through electrical appliance use. Rather, we found that consumer decision-making in electricity consumption is dependent on the characteristics of the particular electrical appliances they use. Additionally, we argue that the payment system for home electricity consumption plays an important role in decision-making, causing biases due to aspects of human psychology discussed here in terms of satisficing and heuristics, payment decoupling, and budgeting. We conclude that decision-making about electrical appliance use and electricity consumption in the home is not always rational and is affected both by the particular characteristics of appliances and the payment system for electricity consumption along with human psychology.

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    File URL: http://www.sciencedirect.com/science/article/B6V2W-4S035F8-3/1/6c38ed2d9d7ddcc28d4111a0f8f48c25
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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 36 (2008)
    Issue (Month): 5 (May)
    Pages: 1679-1686

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    Handle: RePEc:eee:enepol:v:36:y:2008:i:5:p:1679-1686

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    Web page: http://www.elsevier.com/locate/enpol

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    References

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    1. Weber, Lukas, 1997. "Some reflections on barriers to the efficient use of energy," Energy Policy, Elsevier, vol. 25(10), pages 833-835, August.
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    5. Feinberg, Richard A, 1986. " Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation," Journal of Consumer Research, University of Chicago Press, vol. 13(3), pages 348-56, December.
    6. Drazen Prelec & George Loewenstein, 1998. "The Red and the Black: Mental Accounting of Savings and Debt," Marketing Science, INFORMS, vol. 17(1), pages 4-28.
    7. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
    8. Hsing, Yu, 1994. "Estimation of residential demand for electricity with the cross-sectionally correlated and time-wise autoregressive model," Resource and Energy Economics, Elsevier, vol. 16(3), pages 255-263, August.
    9. de Palma, Andre & Myers, Gordon M & Papageorgiou, Yorgos Y, 1994. "Rational Choice under an Imperfect Ability to Choose," American Economic Review, American Economic Association, vol. 84(3), pages 419-40, June.
    10. Unander, Fridtjof & Ettestol, Ingunn & Ting, Mike & Schipper, Lee, 2004. "Residential energy use: an international perspective on long-term trends in Denmark, Norway and Sweden," Energy Policy, Elsevier, vol. 32(12), pages 1395-1404, August.
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    Citations

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    Cited by:
    1. Evens Salies, 2012. "Real-time pricing when consumers have saving costs," Documents de Travail de l'OFCE 2012-11, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. Gaspar, Rui & Antunes, Dalila, 2011. "Energy efficiency and appliance purchases in Europe: Consumer profiles and choice determinants," Energy Policy, Elsevier, vol. 39(11), pages 7335-7346.
    3. Wijaya, Muhammad Ery & Tezuka, Tetsuo, 2013. "Measures for improving the adoption of higher efficiency appliances in Indonesian households: An analysis of lifetime use and decision-making in the purchase of electrical appliances," Applied Energy, Elsevier, vol. 112(C), pages 981-987.
    4. Stefanie Heinzle, 2012. "Disclosure of Energy Operating Cost Information: A Silver Bullet for Overcoming the Energy-Efficiency Gap?," Journal of Consumer Policy, Springer, vol. 35(1), pages 43-64, March.
    5. repec:spo:wpecon:info:hdl:2441/c6t1fl36hv9s7q89j8m3l01c9 is not listed on IDEAS
    6. Torriti, Jacopo, 2013. "The significance of occupancy steadiness in residential consumer response to Time-of-Use pricing: Evidence from a stochastic adjustment model," Utilities Policy, Elsevier, vol. 27(C), pages 49-56.
    7. repec:spo:wpecon:info:hdl:2441/5k7940uimfdf9c898a1ol5436 is not listed on IDEAS
    8. Delmas, Magali A. & Lessem, Neil, 2014. "Saving power to conserve your reputation? The effectiveness of private versus public information," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 353-370.
    9. Yetano Roche, MarĂ­a & Mourato, Susana & Fischedick, Manfred & Pietzner, Katja & Viebahn, Peter, 2010. "Public attitudes towards and demand for hydrogen and fuel cell vehicles: A review of the evidence and methodological implications," Energy Policy, Elsevier, vol. 38(10), pages 5301-5310, October.
    10. Salies, Evens, 2013. "Real-time pricing when some consumers resist in saving electricity," Energy Policy, Elsevier, vol. 59(C), pages 843-849.
    11. Evens Salies, 2010. "Penalizing consumers for saving electricity," Sciences Po publications info:hdl:2441/5k7940uimfd, Sciences Po.
    12. Ma, Guo & Andrews-Speed, Philip & Zhang, Jiandong, 2013. "Chinese consumer attitudes towards energy saving: The case of household electrical appliances in Chongqing," Energy Policy, Elsevier, vol. 56(C), pages 591-602.
    13. Theologos Dergiades & Lefteris Tsoulfidis, 2011. "Revisiting residential demand for electricity in Greece: new evidence from the ARDL approach to cointegration analysis," Empirical Economics, Springer, vol. 41(2), pages 511-531, October.

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