1. Beyond Economics – A behavioural approach to energy efficiency in domestic buildings
Dublin Institute of Technology
Faculty of Business
Marius Claudy
Supervisor: Dr Aidan O’Driscoll

2. Introduction Currently… Before that…
PhD Researcher at Dublin Institute of Technology in Ireland
Before that…
BA in Economics & Social Science (Erfurt, Germany)
MSc International Strategy & Economics (St Andrews, Scotland)
Economist at the Department for Work & Pensions (London, Uk)
Strategy Unit
Forecasting Division
The classification of barriers varies across the literature but generally includes factors like

3. Research Project
Title: Technological Sector Research (2006) Strand III - Energy Policy Research in Domestic Building
Faculties involved: Faculty of Business, Faculty of Engineering, Faculty of the Built Environment, School of Physics, Futures Academy, Focas Institute, and Dublin Energy Laboratory
Overall Objectives:
Generate reliable data on current domestic energy consumption.
Identify relevant social, political, regulatory, technical, economic and environmental barriers to sustainable energy uptake in the sector.
Identify policy tools that increase energy-efficient technology uptake in domestic buildings and groups of buildings.
By that economist describe an underutilisation of energy-efficiency investments that appear cost-effective on an estimated life-cycle cost basis.
This phenomenon is explained by the existence of market barriers like:
- Risk
- High initial costs
- Hidden Costs
- Split incentives (the so-called “landlord-tenant” problem)
- Imperfect information
- Bounded Rationality
(Rohdin et al., 2007, Scott, 1997, Sorrell et al., 2004, Stern, 1986, Jaffe and Stavins, 1994)
The classification of barriers varies across the literature but generally includes factors like

4. Content Background Understanding Low Rates of Adoption of SES
Climate Change – Towards a Micro Perspective
Potential Energy Savings
Technologies
Understanding Low Rates of Adoption of SES
Economics versus Social Psychology
An Integrated Approach
Operationalising the Model
Expected Outcomes
The classification of barriers varies across the literature but generally includes factors like

5. Background Climate Change – A Micro Perspective
It needs the actions of individuals to meet climate change targets.
People often have conflicting ‘goals’
Need to better understand consumers and provide them with appropriate ‘goal vehicles’
through ambitious energy standards for new houses and, more importantly, refurbishing the existing building stock 5

6. Background
Domestic sector provides the largest potential for energy efficiency (EU commission)
Households can save and generate electricity and heat using Sustainable Energy Systems (SES):
Photovoltaic
Small Scale Wind Turbines
Active Solar Water Heating
Heat pumps
Small Scale Hydroelectric Plants
Fuel Cells
Combined Heat and Power Generation (CHP)
Biomass
Micro-generation
Various studies on SES show that investments into these technologies are cost effective[1] and that societal benefits are even greater. [1] Note: the economic potential of sustainable energy systems is largely theoretical, based on discount rates, life-cycle evaluations and current or expected energy prices.
Alternative Energy Systems

7. Background
SES play a minor role in the production of electricity and heat
Identification of influences on SES adoption is vital for the design of effective policies
through ambitious energy standards for new houses and, more importantly, refurbishing the existing building stock

8. Understanding low Adoption
The Energy-Efficiency Gap
Underutilisation of investments that appear cost- and energy effective on an estimated life-cycle cost basis.
Problem are Market Barriers:
- Risk
- High initial costs
- Hidden Costs
- Split incentives (the so-called “landlord-tenant” problem)
- Imperfect information
- Bounded Rationality
(Rohdin et al., 2007, Scott, 1997, Sorrell et al., 2004, Stern, 1986, Jaffe and Stavins, 1994)
The classification of barriers varies across the literature but generally includes factors like

9. Understanding low Adoption
Underlying Assumption:
Consumers act rationally. Barriers prevent them to do so, hence adoption of SES remains low
Implication:
Policies and programs to remove barriers, improve cost-benefit ratios and provide sufficient information

10. Understanding low Adoption
Policies and programmes often show only moderate success
Research shows that its often conviction rather then economics influencing peoples’ decision to adopt SES
E.g.: Bang et al., 2000, Faiers et al., 2007, Hansla et al., 2008, Jakob, 2007,
Paladino and Baggiere, 2007, Steg et al., 2005, Stern, 1986, Stern, 1992

11. Understanding low Adoption
Also psychological determinants
Social and environmental psychology evaluate the impact of personal factors like values, norms, attitudes etc.
Theory of planned behaviour to understand conservation behaviour like SES adoption.
Like economics it follows a rational choice approach
For theory see: Icek Ajzen (1985)
For applications (e.g.) see: Huebner et al (2000), Paladino et al (2007), Bang et al.
(2000) Hansla et al. (2008), Poortinga et al. (2003)

12. An Integrated Framework
Adoption decision is determined by:
Barriers
Regulations, Information, Risk etc.
Psychological Factors
Attitudes
Social Norms
Personal capabilities
Routines or habits
» Extended version of the theory of planned behaviour
For classification see: Stern (2001, 2005)

13. Theory of Planned Behaviour
Contextual Domain
Personal Domain
Individual/Subjective
Shared/Objective
Outcome Belief (Expected Outcome X Desirability)
Normative Belief (Referent Beliefs x Motivation to Comply)
Control Belief (Factor x Access to Factor)
Shared Context ….…)
Relative Advantage Compatibility Complexity Trialability Observability Impact on the Environment
Friends Family Neighbours Government
Information Financial Recourses Bounded Rationality (Technical) Skills Access to Providers
Type of House Technologies Regulations/Policies Economy Weather
Theory of Planned Behaviour
Attitudes
Subjective Norms
Perceived Behavioural Control
External Conditions
Intentions to Invest into Sustainable Energy Systems

14. Operationalising the Model
Underlying Beliefs
Determinants
Intention
Rel. Adv.
Attitudes ?
Compatibility ?
Social Norms ? ?
Intentions
Money ? ?
Perceived Behavioural Control
Information ?
Access Prov.
The classification of barriers varies across the literature but generally includes factors like
External Factors
E.g. Type of House
Pre-Questionnaire
Scales
Final Questionnaire
Analysis

15. Expected Outcome
Insights about householders’ personal beliefs about SES:
Attitudes (Advantages/Disadvantages)
Importance of the opinion of significant others
Perceived Barriers
Insights about the impact of external factors:
Socio economic factors
The type of house
Regulations etc
Estimates of the relative and aggregate strength of each factor
Estimates of how strongly factors influence each other

16. Contribution
Can be translated into more effective programmes and policies
Offer the ‘right’ support
Overcome scepticism
Capture the attention of householders
Gain their involvement
Increase the uptake of sustainable energy systems and helping society to become more sustainable

17. Contribution (2)
Can be used to forecast technology adoption under different policy scenarios.
Segregate Householders according to age, gender, income etc
Use data to evaluate the likelihood of adopting SES
Design (subjective) utility-function
Predict householders’ decisions via stochastic agent-based micro-simulation modelling.
Incorporate different policy scenarios (using data to form assumptions about the effects of certain policies)

18. Thank you!
Any Questions?

19. Pre-Questionnaire Identifying the salient beliefs (attitudes):
What do you believe are the advantages of buying Photovoltaic for your dwelling?
What do you believe are the disadvantages of buying Photovoltaic for your dwelling?
Is there anything else you associate with buying Photovoltaic for your dwelling

20. Existing Scales Example of testing a global measures (attitudes):
Buying Photovoltaic for my dwelling would be:
very useful not useful at all

21. Questionnaire
How well do you belief you are informed about the below mentioned technologies
PV very well __ __ __ __Not well at all
Micro Wind very well __ __ __ __Not well at all
so on
2. Are you using any of the above named technologies?
If yes, please specify which: _________________
3. Filter Question – Which technology do you belief would be the most useful for your dwelling?
________________
4. All Follow up Questions on this technology. 21