The impact of environmental motivations on the individual’s decisions regarding investments in energy efficiency and the adoption of energy-saving habits are analysed on the basis of a representative online survey carried out in Belgium, Germany and the Netherlands. Various energy efficiency investments and daily energy-saving activities are considered. Accounting for endogeneity in the basic estimation model, in particular regarding energy conservation activities, the subject’s experience with extreme weather events are used as an instrument for environmental motivations. This study provides empirical evidence that individual energy efficiency investments are generally driven by environmental motivations. Additionally, for the Dutch and the German sub-samples environmental motivations positively affect daily energy-saving activities. The findings suggest that policy programmes aimed at raising environmental awareness and forming pro-environmental motivations can lead to an increase in energy efficiency investments and daily energy-saving activities.
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Instrumental variables analysis is a method of estimation that is widely used in many economic applications when correlation between the explanatory variables and the error term is suspected.
However, it should be noted that the Netherlands has a relatively flat and even countryside and is thus more used to flooding which particularly in Germany might already count as a serious natural disaster. It can be also argued that the variable measuring extreme weather events is unsuitable to be used as an instrumental variable as it stems from the same survey as all other data and is thus indirectly linked to the energy efficiency measures. While this argument holds, it can be argued that the bias resulting from all variables coming from the same survey is rather small as weather events per se are exogenous and identical for interviewees and non-interviewees, and only their classification as ‘extreme’ might result in any bias at all. However, as this variable remains the most suitable variable available and does not report any significant correlation even considering sub-samples its bias is considered to be negligible.
Probit regressions are performed for binary outcomes, while ordered probit regressions are performed for ordinal dependent variables.
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This paper draws on research performed within the research project “SINCERE”. The financial contribution of the German DFG is acknowledged. We also thank EIIW / vita Foundation for funding part of the survey data used. The paper was presented at the international workshops on the Green Economy held in Shanghai (Shanghai Jiao Tong University, 15 October 2015) and Paris (MINES ParisTech, 12 October 2016) within the SINCERE Project as well as at the 40th IAEE International Energy Conference in Singapore (21 June 2017). This paper has benefited from valuable comments provided by Paul J.J. Welfens (EIIW), Werner Bönte and André Betzer (University of Wuppertal), Matthieu Glachant (MINES ParisTech), Yong Geng (Shanghai Jiao Tong University), Raimund Bleischwitz (University College London), Serdar Turkeli (Maastricht University) and Anne-Françoise Marique (ICIS). The authors are grateful to Christian Dienes (Ifm), Hung Lai and Niyaz Valitov (University of Wuppertal) as well as colleagues at the EIIW for helpful discussions on the subject matter. Special thanks go to René Kemp (Maastricht University) for sharing survey results with us and David Hanrahan (EIIW) for editorial support. The usual disclaimer applies.
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Udalov, V., Perret, J. & Vasseur, V. Environmental motivations behind individuals’ energy efficiency investments and daily energy-saving behaviour: evidence from Germany, the Netherlands and Belgium. Int Econ Econ Policy 14, 481–499 (2017). https://doi.org/10.1007/s10368-017-0381-7
- Environmental behaviour
- Energy efficiency
- Instrumental variable approach
- Environmental motivations
- Extreme whether events