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Some Like it Hot: The Role of Environmental Concern and Comfort Expectations in Energy Retrofit Decisions

Author

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  • Galassi, Veronica

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Madlener, Reinhard

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

This study investigates the role of environmental concern and comfort expectations in the decision to retrofit a dwelling and their implications for the rebound effect. We ex-ante elicit individual preferences for deep thermal energy-saving measures in residential buildings by means of a Discrete Choice Experiment (DCE) among 3,161 owner-occupiers and tenants in Germany. Besides room temperature, we include air quality, level of control over the system, noise reduction, and aesthetics of the dwelling as proxies for indoor comfort. Our model also accounts for monthly payments related to the implementation of the measure – and customized based on tenancy status, building type, and size of the dwelling – as well as technical energy cost savings. Econometric estimation provides significant results for most of the parameter coefficients. Findings show that thermal comfort preferences are heterogeneous: 33% of the respondents attach positive values to an increase in indoor temperature that would result from the deep retrofit, providing evidence in favor of a technical rebound effect. While environmental concern explains heterogeneity in most of the attributes, its interaction with thermal comfort is not significant. Thermal comfort is, however, the least important attribute in the analysis.

Suggested Citation

  • Galassi, Veronica & Madlener, Reinhard, 2016. "Some Like it Hot: The Role of Environmental Concern and Comfort Expectations in Energy Retrofit Decisions," FCN Working Papers 11/2016, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    • Handle: RePEc:ris:fcnwpa:2016_011
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Hendrik Schmitz and Reinhard Madlener, 2020. "Direct and Indirect Energy Rebound Effects in German Households: A Linearized Almost Ideal Demand System Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5), pages 89-118.
    2. Galassi, Veronica & Madlener, Reinhard, 2016. "Shall I Open the Window? An Experiment on Effort and Habits in Thermal-Comfort Adjustment Practices," FCN Working Papers 19/2016, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    3. Frieling, Julius & Madlener, Reinhard, 2017. "Fueling the US Economy: Energy as a Production Factor from the Great Depression until Today," FCN Working Papers 2/2017, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    4. Heesen, Florian & Madlener, Reinhard, 2016. "Consumer Behavior in Energy-Efficient Homes: The Limited Merits of Energy Performance Ratings as Benchmarks," FCN Working Papers 17/2016, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    5. Hendrik Schmitz & Reinhard Madlener, 2020. "Heterogeneity in price responsiveness for residential space heating in Germany," Empirical Economics, Springer, vol. 59(5), pages 2255-2281, November.
    6. Höwer, Daniel & Oberst, Christian A. & Madlener, Reinhard, 2017. "Regionalization Heuristic to Map Spatial Heterogeneity of Macroeconomic Impacts: The Case of the Green Energy Transition in NRW," FCN Working Papers 13/2017, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised 01 Feb 2019.

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    More about this item

    Keywords

    Rebound; Mixed logit; Residential buildings; Energy efficiency;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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