Energy literacy, awareness, and conservation behavior of residential households

- We use a detailed survey of 1,721 Dutch households to measure awareness and conservation behavior in energy consumption.
- Energy literacy and awareness among residential households is low.
- 40 percent of the sample does not appropriately evaluate investment decisions in energy efficient equipment
- Demographics and consumer attitudes affect behavior regarding heating and cooling of a home.

The residential sector accounts for one-fifth of global energy consumption, resulting from the requirements to heat, cool, and light residential dwellings. It is therefore not surprising that energy efficiency in the residential market has gained importance in recent years. In this paper, we examine awareness, literacy and behavior of households with respect to their residential energy expenditures. Using a detailed survey of 1721 Dutch households, we measure the extent to which consumers are aware of their energy consumption and whether they have taken measures to reduce their energy costs. Our results show that “energy literacy” and awareness among respondents is low: just 56% of the respondents are aware of their monthly charges for energy consumption, and 40% do not appropriately evaluate investment decisions in energy efficient equipment. We document that demographics and consumer attitudes towards energy conservation, but not energy literacy and awareness, have direct effects on behavior regarding heating and cooling of the home. The impact of a moderating factor, measured by thermostat settings, ultimately results in strong variation in the energy consumption of private consumers.