Understanding and influencing energy efficient renovation decisions

This thesis is an investigation of why and how homeowners decide to renovate their homes. Energy efficient renovations are of particular interest given their potential contribution to public policy goals including greenhouse gas emission reduction. Policies seeking to improve energy efficiency in existing homes have to influence homeowners’ decisions. This requires a psychologically and behaviourally realistic understanding of the renovation decision process. Different research traditions offer competing models. These are tested through a series of hypotheses on the form and content of the renovation decision. The empirical dataset used combines both stated and revealed preference data. 809 homeowners in British Columbia were surveyed at three different cross-sections of the renovation decision process. The sample included both energy efficient (e.g., windows, insulation) and amenity renovators (e.g., kitchens, bathrooms), and was broadly representative of the population of renovating homeowners in British Columbia. Survey responses were calibrated using actual energy consumption data, and a supplementary survey of realtors. Calibration allowed homeowners’ expectations of the financial costs and benefits of renovating to be evaluated. Firstly, sampled homeowners systematically over-estimated their energy costs. Secondly, these estimates were subject to common information processing and recall biases. Thirdly, even homeowners in the middle of energy efficient renovations had expectations of capital costs, energy cost savings, and property value impacts that were largely unknown or unreliable. More generally, sampled homeowners lacked the basic knowledge necessary to appraise energy efficient renovations as financial investments. Homeowners’ motivations for renovating were more likely to be emotional and aesthetic in the case of amenities, but related to functional outcomes like thermal comfort in the case of energy efficiency. Social norms were influential in both cases but were underreported by homeowners. This was consistent with rationalisation biases which help individuals maintain self-esteem by emphasizing instrumental explanations for their actions. This psychologically realistic characterisation of the renovation decision suggests a range of design criteria for policy, and questions the effectiveness of narrowly-targeted information and incentive policies in their current form. However, policy implications should be generalised with caution given the low energy price and appreciating real estate market characteristics of the study region.Science, Faculty ofResources, Environment and Sustainability (IRES), Institute forGraduat