On the role of present bias and biased price beliefs in household energy consumption

Werthschulte, Madeline; Löschel, Andreas

doi:10.1016/j.jeem.2021.102500

Cited by 32 publications

(10 citation statements)

References 59 publications

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“…One potential explanation for the lack of income effects is the energy billing structure in Germany and other countries around the world. As most households receive annual energy bills (Werthschulte & Löschel, 2021), the savings associated with reductions in consumption may not materialize for several months and certainly not at the time when the conservation actions are taken. This likely reduces the responsiveness to the financial incentives to conserve energy following negative income shocks.…”

Section: Discussionmentioning

confidence: 99%

COVID-19 and the Formation of Energy Conservation Routines: Disentangling the Relative Importance of Attention and Income Shocks

et al. 2023

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Section: Discussionmentioning

confidence: 99%

COVID-19 and the Formation of Energy Conservation Routines: Disentangling the Relative Importance of Attention and Income Shocks

et al. 2023

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“…They would also discount a large-scale outcome such as a decrease in ocean pollution less than a small-scale outcome of decrease in a lake pollution and discount more the prospect of having a more balanced ecosystem in the future when the default option is to overfish now, compared to when both options are available in the future. This also affects decision-making in the domain of environmental values, such as perceptions of climate change (Weber 2010), rate of energy consumption (Werthschulte & Löschel 2021), or payment for environmental services (Clot & Stanton 2014). Although it is yet unclear whether general time-discounting models apply to environmental outcomes, the initial evidence suggests similar discounting mechanisms for environmental and financial outcomes for hypothetical scenarios (Hardisty & Weber 2009).…”

Section: Temporal Discounting Of Environmental Outcomesmentioning

confidence: 99%

Behavioral Economics and Neuroeconomics of Environmental Values

Koundouri

Hammer

Kuhl

et al. 2023

Annu. Rev. Resour. Econ.

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Identifying mechanisms of real-life human decision-making is central to inform effective, human-centric public policy. Here, we report larger trends and synthesize preliminary lessons from behavioral economic and neuroeconomic investigations focusing on environmental values. We review the currently available evidence at different levels of granularity, from insights into how individuals value natural resources (individual level), evidence from work on group externalities, common pool resources, and social norms (social group level) to the study of incentives, policies, and their impact (institutional level). At each level, we identify viable directions for future scientific research and actionable items for policy-makers. Coupled with new technological and methodological advances, we suggest that behavioral economic and neuroeconomic insights may inform an effective strategy to optimize environmental resources. We conclude that the time is ripe for action to enrich policies with scientifically grounded insights, making an impact in the interest of current and future generations. Expected final online publication date for the Annual Review of Resource Economics, Volume 15 is October 2023. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

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“…Therefore, the agent attaches lower weight to future utility. Similarly, agents with lower 𝛿 represent higher discounting and, therefore, care less about the 4 I choose the discount factor (𝛽, 𝛿) formulation for both the theoretical framework and the empirical analysis because it is consistent with the literature (theory and empirical), which use the quasi-hyperbolic discounting model (Bradford et al, 2017;Courtemanche et al, 2015;Fischer, 1999;Laibson, 1997Laibson, , 1998Meier and Sprenger, 2010;O'Doughone andRabin, 1999a, 1999b;Phelps and Polak, 1968;Werthschulte and Löschel, 2021), and because the entire discussion remains uniform throughout the paper. Note that assuming 𝛿 = 1 1+𝜌…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Time preferences and obesity: Evidence from urban India

Dang

2023

Agricultural Economics

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This article examines the relationship between agents’ behavioral attributes (or time preferences) and the problem of obesity and, more generally, problems of both overnutrition and undernutrition. Through a primary survey in western Delhi data were gathered on participants’ food choices and body mass index. Time preferences, as posited by the (β,δ${{\beta}},{{\delta}}$) quasi‐hyperbolic discounting model, were elicited using an incentivized, choice‐based experiment. Estimating a simultaneous two‐equation model, the article finds that individuals in the sample with lower β and/or lower δ (or higher time preferences) make unhealthy food choices, which, in turn, significantly increases their BMI. In addition, a supplementary empirical exercise analyzes a large, secondary unit record data set, with savings as a proxy for time preferences, to provide evidence that these behavioral attributes also explain the problem of underweight (germane in developing countries).

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On the role of present bias and biased price beliefs in household energy consumption

Cited by 32 publications

References 59 publications

COVID-19 and the Formation of Energy Conservation Routines: Disentangling the Relative Importance of Attention and Income Shocks

COVID-19 and the Formation of Energy Conservation Routines: Disentangling the Relative Importance of Attention and Income Shocks

Behavioral Economics and Neuroeconomics of Environmental Values

Time preferences and obesity: Evidence from urban India

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