Wealth, consumption, and energy-efficiency investments

Arbeitspapier

We revisit optimal investment in energy-efficiency, presenting a decision framework built around the agent's wealth and wealth dynamic. An investment rule in the form of a trigger is derived such that the agent invests the first time the energy-carrier price crosses this threshold from below. Wealthier consumers, and those whose wealth grows faster, are seen to have less incentive to invest in energy-efficiency and alternative technologies. We investigate the market for heat pump upgrades in Germany and find scant evidence of an energy-efficiency gap. Modest carbon taxes coupled with subsidies suffice to generate stated policy goals in the short term.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper Series in Production and Energy ; No. 67

Classification and Topics

• Classification: Wirtschaft ; Intertemporal Household Choice; Life Cycle Models and Saving ; Personal Income, Wealth, and Their Distributions ; Criteria for Decision-Making under Risk and Uncertainty ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Technological Change: Choices and Consequences; Diffusion Processes ; Energy: Government Policy ; Energy: Other
• Subject: energy-efficiency gap ; energetic building retrofits ; wealth dynamics

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Britto, Anthony ; Dehler-Holland, Joris ; Fichtner, Wolf
• Event: Veröffentlichung
• (who): Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP)
• (where): Karlsruhe
• (when): 2022

Further information

• DOI: doi:10.5445/IR/1000152410
• Handle: http://hdl.handle.net/10419/266551
• Last update: 10.03.2025, 11:44 AM CET