Financial literacy and household energy efficiency: An analysis of credit market and supply chain

Abstract

We use survey data from China households to investigate the impact of financial literacy on household energy efficiency. We aggregate the household energy use and carbon emissions after calculating the energy and carbon intensity of the related sectors of household expenditure. We show that households with high financial literacy perform higher energy use and carbon emissions but lower energy efficiency. Furthermore, the credit market and supply chain have statistically positive effects on energy use and carbon emissions. The results suggest that the government should take more decisive action to reduce carbon emissions, not rely on households voluntarily.