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Do Household Characteristics Really Matter? A Meta-Analysis on the Determinants of Households’ Energy-Efficiency Investments

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  • Henningsen, Geraldine
  • Wiese, Catharina

Abstract

Most environmental policies that aim to encourage households to invest in more climate- friendly technologies and retrofits, e.g., solar panels, electric cars, or attic insulation, are broadly targeted and do not take households’ individual investment behaviour into account. Scholars have, therefore, emphasised the need to account for household heterogeneity in policy design in order to ensure effective and efficient policy outcomes. However, such a policy design requires the existence of easily accessible household characteristics, which can reliably and consistently explain households’ investment behaviour in a variety of investment scenarios. Using the vast empirical literature on the determinants of households’ investments in energy-efficient home improvements as a case study, we conduct a meta-analysis to (i) determine the magnitude of the effects of easily accessible household characteristics, and; (ii) test the stability of these effects under a variety of circumstances. We integrate the empirical results from 63 publications that investigate the impact of socio-economic characteristics on households’ energy-efficiency investments and examine potential model- and sample-specific factors to explain the variation in the estimated effects. Our findings for the household characteristics: income, age, education, household size, and homeownership, show that significant effects only exist for some of these characteristics, with income and homeownership showing the greatest impact. Furthermore, the results confirm a strong situational component in the effect of these household characteristics on households’ investment decisions, which challenges the practicality of tailored policy design.

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  • Henningsen, Geraldine & Wiese, Catharina, 2019. "Do Household Characteristics Really Matter? A Meta-Analysis on the Determinants of Households’ Energy-Efficiency Investments," MPRA Paper 101701, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:101701
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    Keywords

    Household heterogeneity; Environmental policy; Climate; Meta analysis;
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    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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