On 21 June 2019, Madeline Werthschulte, researcher at the University of Muenster, will present research findings from the ENABLE.EU project at the Friday Lunch Meeting of the Climate Economics Chair of the Paris-Dauphine University. The presented study “Cost misperceptions and energy consumption” was done jointly with Andreas Löschel, Professor at the University of Muenster. The aim of the study is to analyze the extent to which energy cost misperceptions can predict households’ energy consumption. The focus is on two sorts of misperceptions: first, present-biased discounting of future energy costs and second, uncertainty in energy prices. By running an artefactual field experiment with a representative sample of 711 participants, the researchers gathered incentivized measures of these two misperceptions and observed participants’ revealed electricity consumption. The main finding is that participants with present bias are predicted to consume on average 9% more electricity than participants with time-consistent discounting. The results further suggest that neither the true marginal electricity price nor the expected marginal electricity price can predict electricity consumption. Taken together, this raises doubt regarding the effectiveness of classical price-based policies in reducing household electricity consumption.

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About ENABLE.EU

The Energy Union Framework Strategy laid out on 25 February 2015 has embraced a citizens-oriented energy transition based on a low-carbon transformation of the energy system. The success of the energy transition pillar in the Energy Union will hinge upon the social acceptability of the necessary reforms and on the public engagement in conceptualizing, planning, and implementing low carbon energy transitions. The ENABLE.EU project will aim to define the key determinants of individual and collective energy choices in three key consumption areas – transportation, heating & cooling, and electricity – and in the shift to prosumption (users-led initiatives of decentralised energy production and trade). The project will also investigate the interrelations between individual and collective energy choices and their impact on regulatory, technological and investment decisions. The analysis will be based on national household and business surveys in 11 countries, as well as research-area-based comparative case studies.

The ENABLE.EU project has received funding from the European Union’s Horizon 2020 programme under grant agreement 727524.