The role of personality traits in green decision-making

Abstract

This paper investigates whether personality traits play a significant role in the decision to invest in energy efficiency in the residential sector. Using the data from the Understanding Society UK survey, we apply structural equation modelling to examine if the Big Five personality traits help explain why certain individuals choose to invest in energy efficiency measures while others do not, even under nearly identical financial conditions. The results show that personality traits affect one-time, high-cost energy efficiency investments indirectly through environmental attitudes and risk preferences. However, low-cost pro-environmental habits, such as conserving energy and buying ‘green’ products, are mediated only through the environmental attitude, but not through the risk preference channel. This is consistent with the fact that these everyday choices carry a much lower financial risk than an expensive energy efficiency investment. The findings illustrate that personality traits may pose a barrier to reducing energy consumption in the residential sector and underline the need for creating differentiated and targeted products and policies.