Exploring the diffusion of low energy houses: An empirical study in the European Union

Diffusion of low-energy houses is an important part of energy and climate policy in the European Union (EU) and in individual EU countries. Key barriers to the adoption of low-energy houses include additional construction costs and uncertainty sur-rounding actual energy and cost savings. In this paper, we econometrically analyze determinants of low-energy house adoption, including time and risk preferences. We rely on original data from a large survey conducted among households in eight EU countries. To our knowledge, this is the first empirical study of low-energy building adoption to rely on a demographically representative sample. Our set of covariates includes parameters of time and risk preferences that were elicited via state-of-the-art incentivized multiple price list experiments and via self-assessment scales. We find mixed results for the effects of time discounting on low-energy house adoption. Risk preferences do appear to matter: as risk proneness increases, so does the adoption of zero net or energy plus building (but not passive houses). Consistent with the low-cost hypothesis about environmental attitude and social norms.