Use Case 4: Examine the relation of energy consumption behavioural biases with consumers’ financial literacy level
Rationale
Consumers often make energy investment choices which do not maximise their own welfare, choosing to purchase cheaper less efficient appliances which have greater running costs over time, rather than more expensive, highly efficient appliances with lesser running costs. This is referred to as the “energy paradox” and describes the low adoption of energy efficient technologies despite the cost savings for consumers. A key factor which is hypothesised to impact this energy efficiency gap is financial Literacy, or the knowledge and skills to make effective financial decisions. A further factor which may impact this energy efficiency gap is environmental literacy, or consumer environmental awareness, skills, knowledge, ability and attitudes. The impact of financial and environmental literacy on home appliance decision making remains understudied, particularly when consumers are faced with repair/replace decisions. Further, analysis of the factors impacting repair/replace decisions for rental properties remains understudied, even though 30% of European citizens reside in such properties (Eurostat, 2021). This use case seeks to examine, using a serious game, the impact of financial and environmental literacy on home appliance repair/replace decisions for residential properties. Through this, new intervention approaches and policies for enhancing energy efficiency will be developed. For this use case, the following methods will be employed:
Participant groups
Participant groups for the will include residential property owners, tenants and landlords. Information for all groups will be obtained on the duration that they have spent as their current resident type and, for landlords, the volume of properties in their rental portfolio.
Group surveys
Two surveys will be incorporated into the present analysis. Firstly, a short survey will be conducted prior to the serious game to determine participants’ energy-related financial literacy, environmental literacy and socio-demographic factors. A follow-up survey will also be circulated to the players of the serious game six to twelve months after their participation.
Serious game
A serious game will be developed to determine the willingness of different resident types to repair or replace an appliance and to examine the impact of financial literacy and information provision on these decisions. Participants will be assigned a role that matches their residential status (i.e. landlord, tenant or homeowner) to determine the factors that influence decision making for each different resident type.
Goal setting interfaces
Interfaces based on users’ desire of fulfilling a given objective, either induced by the interface or self imposed by home inhabitants.
Direct feedback
Timely updated in home displays (IHDs) showing the home current energy consumption.
Timely updated in home displays (IHDs) showing the home current energy consumption.
Showing how home consumption evolves over time and highlighting temporal correlations.
Rationale
Goal setting interfaces
Interfaces based on users’ desire of fulfilling a given objective, either induced by the interface or self imposed by home inhabitants.
Direct feedback
Timely updated in home displays (IHDs) showing the home current energy consumption.
Timely updated in home displays (IHDs) showing the home current energy consumption.
Showing how home consumption evolves over time and highlighting temporal correlations.
Consumers often make energy investment choices which do not maximise their own welfare, choosing to purchase cheaper less efficient appliances which have greater running costs over time, rather than more expensive, highly efficient appliances with lesser running costs. This is referred to as the “energy paradox” and describes the low adoption of energy efficient technologies despite the cost savings for consumers. A key factor which is hypothesised to impact this energy efficiency gap is financial Literacy, or the knowledge and skills to make effective financial decisions. A further factor which may impact this energy efficiency gap is environmental literacy, or consumer environmental awareness, skills, knowledge, ability and attitudes. The impact of financial and environmental literacy on home appliance decision making remains understudied, particularly when consumers are faced with repair/replace decisions. Further, analysis of the factors impacting repair/replace decisions for rental properties remains understudied, even though 30% of European citizens reside in such properties (Eurostat, 2021). This use case seeks to examine, using a serious game, the impact of financial and environmental literacy on home appliance repair/replace decisions for residential properties. Through this, new intervention approaches and policies for enhancing energy efficiency will be developed. For this use case, the following methods will be employed:
Participant group information
Participant groups for the present analysis will include residential property owners, tenants and landlords. Information for all groups will be obtained on the duration that they have spent as their current resident type and, for landlords, the volume of properties in their rental portfolio.
Group surveys
Two surveys will be incorporated into the present analysis. Firstly, a short survey will be conducted prior to the serious game to determine participants’ energy-related financial literacy, environmental literacy and socio-demographic factors. A follow-up survey will also be circulated to the players of the serious game six to twelve months after their participation.
Serious game
A serious game will be developed to determine the willingness of different resident types to repair or replace an appliance and the impact of financial literacy and information provision on these decisions. Participants will be assigned a role that matches their residential status (i.e. landlord, tenant or homeowner) to determine the factors influencing decision making for each different resident type.
Research Questions
Design & Impact
We expect that low levels of financial and environmental literacy may deter consumers from choosing to repair, or replace appliances with more energy-efficient appliances. The serious game will be used to explore the impact of behavioural biases on residential energy decision making. To further explore the factors impacting repair/replace decision making for different population groups, several focus groups will be convened using purposeful sampling – taking people from traditionally under-represented socio-economic groups (particularly homeowners, renters, students, elderly). Through this, rich data on relevant behavioural, financial and environmental barriers to effective energy decisions will be identified so as to be targeted within intervention.
Key Performance Indicators
Design & Impact
We expect that low levels of financial and environmental literacy may deter consumers from choosing to repair, or replace appliances with more energy-efficient appliances. The serious game will be used to explore the impact of behavioural biases on residential energy decision making. To further explore the factors impacting repair/replace decision making for different population groups, several focus groups will be convened using purposeful sampling – taking people from traditionally under-represented socio-economic groups (particularly homeowners, renters, students, elderly). Through this, rich data on relevant behavioural, financial and environmental barriers to effective energy decisions will be identified so as to be targeted within intervention.
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No