The role of risk and trust attitudes in explaining residential energy demand: Evidence from the United Kingdom

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.

Trust to Go Green: An Exploration of Consumer Intentions for Eco-friendly Convenience Food

“…Finally, trust has been recognized as an important predictor of consumer beliefs and of consumer behaviour (Volland, 2017). Hobbs and Goddard (2015) stressed that most economic literature refers to generalized trust, namely, trust in others.…”

Interactions in Swiss households’ energy demand: A holistic approach

“…Third, a question that has received similarly little attention revolves around the effects of household attitudes, values and preferences on energy requirements. While an increasing number of studies have investigated the effects of these factors on household direct energy demand and savings (Brandon & Lewis, 1999;Martinsson et al, 2011;Volland, 2017), few have addressed their relevance for explaining either total or indirect energy demand. Notable exceptions are the contributions by Abrahamse & Steg (2009), Gatersleben et al (2002) and Vringer et al (2007), who all find that such psychological attributes improve model predictions for energy use in both domains.…”

“…For instance, Gatersleben et al (2002) show that concern about the state of the environment, increased frequency of self-reported recycling and purchase of environmentally sound food products decreased household direct energy use. Vringer et al (2007) (Fischbacher et al, 2015;Torgler et al, 2009;Volland, 2017).…”

“…In defining our independent variables we draw on the broad literature in economics and psychology on the determinants of direct and embodied energy requirements (Abrahamse & Steg, 2009;Lenzen et al, 2006;Reinders et al, 2003;Kees Vringer et al, 2007 Finally, we focus on three psychological characteristics that figure prominently in the increasing stream of literature on the psychological determinants of household energy demand. For one, environmental attitudes, that is the psychological tendency to view the natural environment as a positive feature worth protecting (Kaiser et al, 1999;Milfont & Duckitt, 2010) has been related to both energy use (e.g., Lange et al, 2014;Volland, 2017) and energy savings (Abrahamse & Steg, 2009). Second, attitudes towards risk taking have been linked with both investment in energyefficient durables (e.g., Farsi, 2010;Qiu et al, 2014) and energy consumption (Fischbacher et al, 2015;Volland, 2017).…”

“…For one, environmental attitudes, that is the psychological tendency to view the natural environment as a positive feature worth protecting (Kaiser et al, 1999;Milfont & Duckitt, 2010) has been related to both energy use (e.g., Lange et al, 2014;Volland, 2017) and energy savings (Abrahamse & Steg, 2009). Second, attitudes towards risk taking have been linked with both investment in energyefficient durables (e.g., Farsi, 2010;Qiu et al, 2014) and energy consumption (Fischbacher et al, 2015;Volland, 2017). Third, since one's energy consumption affects environmental quality and via this channel the welfare of others, social preferences have been linked with pro-environmental behaviours and attitudes (Torgler et al, 2009) including investment into energy-efficient durables (Fischbacher et al, 2015) and in-home energy use (Fischbacher et al, 2015;Volland, 2017).…”