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

dc.contributor.authorSchleich, Joachim
dc.contributor.authorGassmann, Xavier
dc.contributor.authorFaure, Corinne
dc.contributor.authorMeissner, Thomas
dc.date.accessioned2019-11-14T16:42:21Z
dc.date.available2019-11-14T16:42:21Z
dc.date.issued2016-07-30
dc.description.abstractImplicit 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 guidance for policy-making since the underlying sources cannot be identified. Instead, 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).en
dc.identifier.eissn1873-6777
dc.identifier.issn0301-4215
dc.identifier.urihttps://depositonce.tu-berlin.de/handle/11303/10312
dc.identifier.urihttp://dx.doi.org/10.14279/depositonce-9274
dc.language.isoen
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/
dc.subject.ddc620 Ingenieurwissenschaften und zugeordnete Tätigkeitende
dc.subject.otherenergy efficiencyen
dc.subject.otherenergy modelingen
dc.subject.otherimplicit discount rateen
dc.subject.otherenergy policyen
dc.subject.otherbehavioral economicsen
dc.titleMaking the implicit explicit: A look inside the implicit discount rateen
dc.typeArticleen
dc.type.versionpublishedVersionen
dcterms.bibliographicCitation.doi10.1016/j.enpol.2016.07.044
dcterms.bibliographicCitation.journaltitleEnergy Policyen
dcterms.bibliographicCitation.originalpublishernameElsevieren
dcterms.bibliographicCitation.originalpublisherplaceAmsterdamen
dcterms.bibliographicCitation.pageend331
dcterms.bibliographicCitation.pagestart321
dcterms.bibliographicCitation.volume97
tub.accessrights.dnbfree
tub.affiliationFak. 7 Wirtschaft und Management::Inst. Volkswirtschaftslehre und Wirtschaftsrecht (IVWR)::FG Makroökonomikde
tub.affiliation.facultyFak. 7 Wirtschaft und Managementde
tub.affiliation.groupFG Makroökonomikde
tub.affiliation.instituteInst. Volkswirtschaftslehre und Wirtschaftsrecht (IVWR)de
tub.publisher.universityorinstitutionTechnische Universität Berlinde

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