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The Role of Risk and Trust Attitudes in Explaining Residential Energy Demand: Evidence from the United Kingdom

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  • Benjamin Volland

Abstract

Recent research into the determinants of household energy consumption has aimed to incorporate findings from economics, sociology and psychology in order to obtain a more comprehensive understanding of the factors determining energy demand. The current paper contributes to this nascent stream of literature by studying the relationship between risk attitudes, trust propensity and energy consumption at the household level. Drawing on the British Household Panel Survey, a well-known data set in the context of energy studies, I show that trust is negatively correlated with household energy demand, while higher risk tolerance leads to increases in residential energy use. Potential explanations for these findings are investigated, suggesting that risk preferences may be related with overall appliance stock and the size of the rebound effect.

Suggested Citation

  • Benjamin Volland, 2016. "The Role of Risk and Trust Attitudes in Explaining Residential Energy Demand: Evidence from the United Kingdom," IRENE Working Papers 16-02, IRENE Institute of Economic Research.
    • Handle: RePEc:irn:wpaper:16-02
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Risk attitudes; Trust; Energy expenditures; BHPS; UK Households.;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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