Arbeitspapier

Making the implicit explicit: A look inside the implicit discount rate

Implicit discount rates (IDRs) are employed in energy models to capture household investment decisions, yet the factors behind the IDR and their respective implications for policy-making usually remain blurred and fractional. The proposed comprehensive framework distinguishes three broad categories of factors underlying the IDR for household adoption of energy-efficient technologies (EETs): preferences (notably over time, risk, loss, debt, and the environment), predictable (ir)rational behavior (bounded rationality, rational inattention, behavioral biases), and external barriers to energy efficiency. Existing empirical findings suggest that the factors underlying the IDRs that differ across household characteristics and technologies should be accounted for in energy models. Furthermore, the framework allows for a fresh look at the interplay of IDRs and policies. We argue that a simple observation of high IDRs (or observing correlations between IDRs and socio-economic characteristics) does not provide guid-ance for policy-making since the underlying sources cannot be identified. In-stead, we propose that some of the factors underlying the IDR - notably external barriers - can be changed (through directed policy interventions) whereas other factors - notably preferences and predictable (ir)rational behavior - are innate and can only be taken into account (through reactive policy interventions).

Sprache
Englisch

Erschienen in
Series: Working Paper Sustainability and Innovation ; No. S04/2016

Klassifikation
Wirtschaft
Thema
energy efficiency
energy modeling
implicit discount rate
energy policy
behavioral economics

Ereignis
Geistige Schöpfung
(wer)
Schleich, Joachim
Gassmann, Xavier
Faure, Corinne
Meissner, Thomas
Ereignis
Veröffentlichung
(wer)
Fraunhofer-Institut für System- und Innovationsforschung ISI
(wo)
Karlsruhe
(wann)
2016

Handle
URN
urn:nbn:de:0011-n-4040318
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Schleich, Joachim
  • Gassmann, Xavier
  • Faure, Corinne
  • Meissner, Thomas
  • Fraunhofer-Institut für System- und Innovationsforschung ISI

Entstanden

  • 2016

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