Decision-making in electrical appliance use in the home
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.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- 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.
- John Ameriks & Andrew Caplin & John Leahy, 2004.
"The Absent-Minded Consumer,"
NBER Working Papers
10216, National Bureau of Economic Research, Inc.
- John Leahy & Andrew Caplin, 2004. "The Absentminded Consumer," 2004 Meeting Papers 784, Society for Economic Dynamics.
- 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 419-440, June.
- 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.
- Hendrik S. Houthakker, 1980. "Residential Electricity Revisited," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
- Sanstad, Alan H. & Howarth, Richard B., 1994. "`Normal' markets, market imperfections and energy efficiency," Energy Policy, Elsevier, vol. 22(10), pages 811-818, October.
- Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Weber, Lukas, 1997. "Some reflections on barriers to the efficient use of energy," Energy Policy, Elsevier, vol. 25(10), pages 833-835, August.
- Feinberg, Richard A, 1986. " Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation," Journal of Consumer Research, Oxford University Press, vol. 13(3), pages 348-356, December.
- John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June. Full references (including those not matched with items on IDEAS)