The Role of Environmental and Financial Concerns on Energy-Saving Investments: A Stochastic Dominance Analysis

In this paper we investigate whether households’ environmental and financial concerns have any effect on their energy-saving investments. Exploiting a comprehensive dataset covering thirty European countries we investigate if financially concerned and environmentally minded households feature different adoption paths. The results show that environmental and financial concerns play an important role in the decision of adopting energy saving technologies, thus paving the way for policy actions targeted at enhancing consumer awareness. Our analysis also revealed that environmentally and financially concerned households exhibit different socio-economic profiles. We find that environmentally minded, highly educated households living in urban areas with large family size are more likely to adopt than their counterparts with low level of education living in rural areas. On the other side, income is an important factor explaining adoption of economically concerned household. From the methodological point of view our analysis is based on both parametric and non-parametric methods. Namely, we use stochastic dominance analysis to rank distribution functions of household behaviour and the logit model to investigate the socio-economic profile of different groups.