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“Show Me the Energy Costs†: Short and Long-term Energy Cost Disclosure Effects on Willingness-to-pay for Residential Energy Efficiency

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  • James Carroll
  • Claudia Aravena
  • Marco Boeri
  • Eleanor Denny

Abstract

Imperfect information on future energy costs can lead households to underestimate the monetary savings of more energy efficient technologies, with implications for future energy supply, emissions and the climate. These hypotheses are explored using a randomised discrete choice experiment for property rental decisions. Results show that when energy consumption is expressed in physical units (as per the current EU labels) the willingness-to-pay for energy efficiency improvements is small and marginally significant. While bimonthly energy cost information has no effect on the valuation of energy efficiency, annual monetary energy cost information leads to a significant increase. This is the first paper to compare short and long-term point of sale energy cost information for household property decisions.There are clear implications for labelling policy for properties—framing energy consumption according to long-term monetary cost increases the demand for energy efficiency.

Suggested Citation

  • James Carroll & Claudia Aravena & Marco Boeri & Eleanor Denny, 2022. "“Show Me the Energy Costs†: Short and Long-term Energy Cost Disclosure Effects on Willingness-to-pay for Residential Energy Efficiency," The Energy Journal, , vol. 43(3), pages 133-152, May.
    • Handle: RePEc:sae:enejou:v:43:y:2022:i:3:p:133-152
    DOI: 10.5547/01956574.43.3.jcar
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