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Empower the consumer! Energy-related financial literacy and its socioeconomic determinants

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Abstract
To be aware of the potential for energy savings in their homes, individuals need specific energy-related and financial knowledge. In addition, they also need the cognitive skills to apply this knowledge, for example when it comes to the calculation of the lifetime cost of household appliances or energy-efficient renovations. This set of knowledge and skills is related to two literacy concepts, i.e. energy and financial literacy. In this paper, we propose a new concept of literacy that we call “energy-related financial literacy”. Further, we present information on the level of financial literacy as well as on the level of energy-related financial literacy for a sample of European households. In the empirical part of the paper we estimate several ordered probit models in order to analyse the determinants of the level of energy-related financial literacy, with a particular interest to understanding the role of gender. Our results show that the level of energy-related financial literacy is relatively low and heterogeneous across the European countries. Moreover, the results confirm previous findings about the gender gap in financial literacy, with males being associated with higher levels of the index. We also identify such a gender gap for energy-related financial literacy.

Suggested Citation

  • Julia Blasch & Nina Boogen & Claudio Daminato & Massimo Filippini, 2018. "Empower the consumer! Energy-related financial literacy and its socioeconomic determinants," CER-ETH Economics working paper series 18/289, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    • Handle: RePEc:eth:wpswif:18-289
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    Cited by:

    1. Ilaria Vigna & Jessica Balest & Wilmer Pasut & Roberta Pernetti, 2020. "Office Occupants’ Perspective Dealing with Energy Flexibility: A Large-Scale Survey in the Province of Bolzano," Energies, MDPI, vol. 13(17), pages 1-20, August.
    2. Filippini, Massimo & Kumar, Nilkanth & Srinivasan, Suchita, 2020. "Energy-related financial literacy and bounded rationality in appliance replacement attitudes: evidence from Nepal," Environment and Development Economics, Cambridge University Press, vol. 25(4), pages 399-422, August.
    3. Nolan Ritter & Julia Anna Bingler, 2021. "Do homo sapiens know their prices? Insights on dysfunctional price mechanisms from a large field experiment," CER-ETH Economics working paper series 21/348, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    4. Cerruti, Davide & Daminato, Claudio & Filippini, Massimo, 2023. "The impact of policy awareness: Evidence from vehicle choices response to fiscal incentives," Journal of Public Economics, Elsevier, vol. 226(C).
    5. Panu Kalmi & Gianluca Trotta & Andrius Kažukauskas, 2021. "Energy‐related financial literacy and electricity consumption: Survey‐based evidence from Finland," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 1062-1089, September.
    6. Boogen, Nina & Daminato, Claudio & Filippini, Massimo & Obrist, Adrian, 2022. "Can information about energy costs affect consumers’ choices? Evidence from a field experiment☆," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 568-588.
    7. Julia Blasch & Claudio Daminato, 2018. "Behavioral anomalies and energy-related individual choices: the role of status-quo bias," CER-ETH Economics working paper series 18/300, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    8. Brent, Daniel A. & Ward, Michael B., 2018. "Energy efficiency and financial literacy," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 181-216.
    9. Ana Martins & Mara Madaleno & Marta Ferreira Dias, 2020. "Financial Knowledge’s Role in Portuguese Energy Literacy," Energies, MDPI, vol. 13(13), pages 1-22, July.
    10. Ljerka Cerović & Ana Malnar & Dorotea Sinčić, 2024. "Energy Literacy of Economics Students in Rijeka: Knowledge, Attitudes, and Behavioral Approach," Energies, MDPI, vol. 17(8), pages 1-31, April.
    11. Teija Keränen & Heidi Enwald, 2023. "Everyday Energy Information Literacy and Attitudes towards Energy-Related Decisions: Gender Differences among Finns," Resources, MDPI, vol. 12(6), pages 1-16, June.
    12. Benedikt Maciosek & Mehdi Farsi & Sylvain Weber & Martin Jakob, 2022. "Impact of complexity and experience on energy investment decisions for residential buildings," IRENE Working Papers 22-07, IRENE Institute of Economic Research.
    13. Nilkanth Kumar & Nirmal Kumar Raut & Suchita Srinivasan, 2022. "Herd behavior in the choice of motorcycles: Evidence from Nepal," CER-ETH Economics working paper series 22/366, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    14. S´ebastien Houde & Tobias Wekhof, 2021. "The Narrative of the Energy Efficiency Gap," CER-ETH Economics working paper series 21/359, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    15. Justyna Chodkowska-Miszczuk & Maria Kola-Bezka & Agata Lewandowska & Stanislav Martinát, 2021. "Local Communities’ Energy Literacy as a Way to Rural Resilience—An Insight from Inner Peripheries," Energies, MDPI, vol. 14(9), pages 1-18, April.

    More about this item

    Keywords

    Energy literacy; financial literacy; energy-related financial literacy; consumer awareness; energy knowledge;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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