Examining framing effects on the decision-making processes of households in energy investments : An online experiment

With the increased energy demands which are needed to fuel the human development and economic growth we also observe a trend for global environmental problems caused by burning fossil fuels. Tackling problems like global warming would mean either tapping into the large CO2 emitters and having them shift to renewable energy alternatives or motivating change on the level of individuals which would lead to a general reduction in energy consumption. This thesis features an online experiment with 320 participants, recruited through Amazon Mechanical Turk, who were randomly assigned to either an environmental or an economic frame, and performed tasks on energy-related investments, risk elicitation and environmental preferences (by framing we mean controlling the formulation of the decision problem). The main purpose of the experiment was to examine the effects of framing on the decision-making processes of households in regards to energy investments. The results we obtained with 90 and 99% confidence provide evidence that framing does have an effect on investment choices, moreover we have also observed that environmental concern is an important predictor of households’ investments. Going beyond our main hypothesis, we have conducted some exploratory analysis of the data which highlighted a great potential for the scientific method within the domain of energy-related investments. Finally, the results from our experiment suggest that framing could be a successful instrument in the hands of those working with policy-making and communication