Decision-making in electrical appliance use in the home

Abstract

This paper presents the results of a survey as well as an argument from the viewpoint of behavioral economics with the aim of clarifying how consumers make decisions about electrical appliance use in the home. A survey of consumers showed that most have little awareness of the energy efficiency of appliances, the price of the services produced by electrical appliances, or electricity rates. These findings indicate that price does not function as a signal in electricity consumption through electrical appliance use. Rather, we found that consumer decision-making in electricity consumption is dependent on the characteristics of the particular electrical appliances they use. Additionally, we argue that the payment system for home electricity consumption plays an important role in decision-making, causing biases due to aspects of human psychology discussed here in terms of satisficing and heuristics, payment decoupling, and budgeting. We conclude that decision-making about electrical appliance use and electricity consumption in the home is not always rational and is affected both by the particular characteristics of appliances and the payment system for electricity consumption along with human psychology.