Households' pro-environmental habits and investments in water and energy consumption: Determinants and relationships

• We jointly estimate households' pro-environmental behaviours and investment decisions.
• We consider water and energy efficiency, and waste recycling.
• We find positive interactions between different pro-environmental behaviours.
• We find spill over effects in pro-environmental behaviours.
• Subsidisation policies will induce households to adopt efficient appliances.

Economic instruments have received a lot of attention in the literature dealing with water and energy demand management. However factors driving households' behaviour/habits and investment in water-saving and energy-saving equipment have been seldom studied. The main purpose of this article is to contribute to this literature by analysing the main determinants of a set of households' conservation habits and pro-environmental investment decisions. Using household-level data from Spain, we show that conservation habits and the purchase of resource-efficient appliances are not independent.