Household Energy Efficiency Improvements: Evidence from ABS 2012

Household Energy Consumption Survey

Summer Wang, Rosalynn Mathews and Kay Cao1

Analytical Services Unit
Australian Bureau of Statistics

Abstract

This study utilises data from the ABS 2012 Household Energy Consumption Survey to investigate the

factors that influence household energy efficiency behaviours. Logistic regressions are applied to

analyse household energy efficiency modification actions and intentions. Estimation results reveal

the important determining factors including household income, family composition, age of reference

person, home ownership, dwelling type and age and geographical location. Also important are the

psychological factors such as household energy efficiency attitudes, perceived behavioural control

and past investment experiences. On the other hand, the reference persons gender and occupation,

dwelling size and current energy efficiency characteristics are not verified in this analysis to

significantly impact on household modification intentions or actions. The paper highlights the

important contributions to the current literature from the available dataset and its analysis as well

as suggesting further potential research directions.

Keywords: Household Energy Efficiency Behaviours, ABS Surveys, Logistic Models

JEL codes: Q40, D19

1
The views in this paper are those of the authors and do not necessarily represent the views of the Australian
Bureau of Statistics. Responsibility for any errors or omissions remains solely with the authors. The authors
would like to thank Ruel Abello and Stephanie Cornes for their comments on the first draft of the paper, Dean
Adams and Philip Elliott for their help during the research process. For correspondence, please contact
Summer Wang on summer.wang@abs.gov.au.

1
 I. Introduction

The current drive towards reducing energy consumption and greenhouse gas emissions has led to a

focus on household energy efficiency and conservation behaviours. These refer to actions or

intentions to make modifications to the dwelling to conserve energy, such as replacing hot water

systems or installing insulation, or replacing any heaters, coolers or any major whitegoods to more

energy efficient models. For energy efficiency measures to be adopted, it is vital that the motivations

behind household actions are well understood (Christie et al., 2011). Thus, in this paper, we seek to

empirically explore the relationship between household energy efficiency behaviours, household

modifications and the factors that influence them, using data from the ABS 2012 Household Energy

Consumption Survey (HECS).

The HECS provides detailed information on a range of energy efficiency modification types. Table 1

below provides the percentage of the households who made energy efficient improvements during

the period from April 2012 to March 2013 by the intention indicated in the March 2012 survey.

Table 1: Types of modification made by households, by intention

Intention to make Did not intend to
improvements make
improvements
% %
Type of modifications made during follow-up period
(April 2012 - March 2013)
Owner households (a)
Replaced heater, cooler or major white good 38 31
Installed solar electricity or hot water system *21 *16
Installed insulation **7 **4
Installed ceiling fans *12 **3
Installed window treatments 36 22
Installed hot water system **2 **5
Installed other energy efficient improvements *9 *9

Intention and improvement made were the same 59 na

Solar electricity or hot water system 56 na
Window treatments 72 na
Insulation, ceiling fans, hot water systems or other improvements 59 na

Renter households
Replaced heater, cooler or major whitegoods *16 *14
* estimate has a relative standard error of 25% to 50 percent and should be used with caution.
** estimate has a relative standard error greater than 50% and is considered too unreliable for general use.
(a) Includes households with a life tenure or rent/ buy tenure arrangement.
na not applicable
Source: Household Energy Consumption Survey, Australia: Summary of results, (ABS, 2013), (Cat. no. 4670.0)

2
The paper is organised as follows. Section 2 presents a review of the empirical studies of the

determinants of household energy efficiency behaviours. In section 3, the econometric framework

adopted for this analysis is explained. Section 4 discusses the data source and variables used for this

analysis. Section 5 presents the empirical models and the estimation results. Section 6 summarises

the key findings, implications and the potential limitations of this paper.

II. Literature review

The literature indicates that residential energy conservation investment decisions depend on a

variety of factors (e.g. Stern and Oskamp, 1987; McKenzie-Mohr et al., 1995; Hansla et al., 2008).

These can be grouped into three main factors: the socio-demographic, psychological and the

structural factors (e.g., Olsen, 1981; Steg, 2008; Stern, 1992; Kang et al., 2012; Black et al., 1985;

DeWaters and Powers, 2011; Dias et al., 2004). Although these factors have received varying levels

of attention in the literature, few, if any, have addressed household energy-efficiency behaviour in

an integrated way (Wang, et al., 2011).

a. Socio-demographic factors

The research to date indicates that household energy efficiency behaviours appear to be mainly

related to household socio-demographic variables, such as the ones described below. These shape

the opportunities and constraints for the adoptions of energy-efficiency measures (Dillman et al.,

1983; Walsh, 1989; Long, 1993; Scott, 1997; Poortinga et al., 2003; Druckman and Jackson, 2008;

ODoherty et al., 2008; Hawkins et al., 2007).

i. Income level

A vast amount of literature shows that household income level is positively related to energy

efficiency investments (Kasulis et al., 1981; Dillman et al., 1983; Walsh, 1989; Schipper and Hawk,

1991; Scott, 1997; Poortinga et al., 2003). There may be varying reasons for this. If a household

belongs to a low income group, it would be very likely to consume less amounts of energy as a cost

saving measure and would not have the ability to respond to calls for greater conservation activity

3
(Kasulis et al., 1981). The restricted access to credit and transactions costs (such as time and effort)

also makes residential conservation actions prohibitive for low income households (Dillman et al.,

1983; Walsh, 1989).

In contrast, Gamtessa (2013) argues that high-income households are less likely to undertake retrofit

investment, possibly because energy expenditure accounts for a very small share of their income.

ii. Household composition

Factors such as household size and the number of young children in the household are suggested to

have a direct effect on energy behaviour (Long, 1993; Van Raaij and Verhallen, 1983; Young, 2008).

Household size is expected to be positively related to the adoption of energy-efficient appliances as

more intense use would lead to faster replacement. For similar reasons, the number of young

children in the household is expected to increase diffusion of energy-efficient appliances like

washing machines or dryers (Young, 2008). In contrast, empirical results by Curtis (1984) implies

higher energy-saving activity for households with two to four members than for other household

sizes, while the impact of household size on energy-saving expenditures in the study by Long (1993)

is negative.

iii. Education background & employment

The empirical evidence of the impact of education levels and occupations on energy-saving activities

is rather mixed. Some studies indicate that higher levels of education are associated with greater

energy-saving activities (Hirst and Goeltz, 1982; Brechling and Smith, 1994; Scott, 1997), while

others find no evidence of the impact of education on energy efficiency behaviours (Curtis et al.,

1984; Ritchie et al., 1981; Stead, 2005; Mills and Schleich, 2010). Similarly, some research claims that

people with high skill occupations can easily adopt energy conservation strategies (Olsen, 1983),

while others report that occupation of the respondents had no significant influence on households

energy conservation actions (Curtis et al., 1984).

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 iv. Age

Numerous empirical studies show that home owners age influences energy efficiency behaviour,

though the effects appear to be rather mixed (Carlsson-Kanyama et al., 2005; Mahapatra and

Gustavsson, 2008). Some studies argue that younger heads of households are more likely to make a

conservation improvement, and older home owners are less likely to adopt energy efficiency

investment measures (Mahapatra and Gustavsson, 2008). While Long (1993) reveals a positive sign

between the age of the respondent and the money spent for energy efficiency improvements.

Whereas Hirst and Goeltz (1982) clarify that age has a curvilinear relationship with conservation

behaviour, as young and elderly households take fewer actions than those in their middle age.

v. Gender

Some studies claim that women are more willing to invest in energy efficiency improvement (Zelezny

et al., 2000; Carlsson-Kanyama and Linden, 2007). A meta-review by Zelezny et al. (2000) of 13

studies showed that in approximately 70% of the studies, women were reported to show more pro-

environmental behaviour. Yue et al. (2013) also observe that women have more interpersonal

interaction about energy conservations, compared to other groups. However, other studies report

no statistical relationship between respondents gender and their energy efficiency behaviour

(Olsen, 1983; Poortinga et al., 2003; Sardianou, 2007).

vi. Home ownership

Some studies suggest that the home ownership status is a vital influence in the adoption of energy

efficiency measures since they are more available to home owners, whereas curtailment of energy

consumption may be the only option for renters (Black et al., 1985; Costanzo et al., 1986; Rehdanz,

2007). For this reason, some researchers only include the households who are the home owners in

their surveys to conduct the investigation of residential energy efficiency behaviours.

5
 vii. Dwelling characteristics

There is also empirical evidence on the impact of dwelling characteristics on household energy

efficiency investments. Nair (2010) indicates that the age of the house can influence the adoption of

building energy efficiency measures. Ritchie et al. (1981) find a positive relationship between

housing size and the adoption of energy-efficient measures. Gamtessa (2013) observes that the

existing energy efficiency characteristics of a house, indicated by thermal insulation, window and

doors energy efficiency characteristics, etc., have a strong impact on household future retrofit

decision.

viii. Geographical location

The geographical location of the house has also been found to be another vital determinant of

energy saving behaviour (Zografakis et al., 2010; Nair, 2010; Walsh, 1989). Scott (1997) observes a

positive relationship between urbanisation and diffusion of several energy-efficient technologies in

Ireland. Furthermore, Walsh (1989) and Long (1993) observe that home owners residing in warmer

climates are statistically less likely to invest in energy conservation than families living in colder

states.

b. Psychological factors

A number of studies suggest that energy conserving behaviours may also be dependent on

psychological variables (Abrahamse and Steg, 2009). Some studies even argue that household

energy savings appear to be mostly associated with psychological factors rather than socio-

demographic characteristics (Brandon and Lewis, 1999; Abrahamse and Steg, 2009). The theory of

planned behaviour (TPB) (Ajzen, 1991) and Schwartz (1977) norm activation model (NAM) are often

used to examine pro-environmental behaviour (Bonnes & Bonaiuto, 2002). Several studies have

extended the TPB with NAM variables, the personal norm concept in particular (Parker et al., 1995).

6
Psychological factors are therefore broken into attitude, subjective norms, perceived behaviour

control and residue effects for the analysis of household energy efficiency behaviours in current

literature (Wang, et al., 2011).

i. Attitude

Attitude refers to the degree of peoples awareness of performing electricity-saving behaviour,

which largely depends on the evaluation of preference to electricity saving and the information the

individual holds towards such a behaviour (Wang, et al., 2011). Households attitudes towards caring

for the environment and their perception of their contribution to the energy problems are important

factors influencing energy conservation activities (Verhallen and Van Raaij 1981; Ek and Sderholm,

2010). A positive attitude towards the environment may encourage the adoption of energy

efficiency measures (Barr et al., 2005; Darby, 2006; Palmborg, 1986), and the greater the perceived

seriousness of the problem, the more likely one would support strategies for promoting energy

conservation (Olsen, 1983). Households knowledge of energy conservation alternatives is also vital

for taking energy conservation actions (Olsen, 1981). Some researchers therefore integrate those

two attitudinal perspectives and indicate that people with stronger awareness for climate change

and more energy saving information are more likely to purchase renewable energy and participate in

energy-saving activities (Zografakis et al., 2010).

ii. Subjective norms

Subjective norm refers to the perceived social pressure to perform or retrain from behaviour

(Abrahamse and Steg, 2009). Ek and Sderholm (2010) state that social interactions attach great

importance to electricity saving behaviour since other peoples attitudes and behaviour in electricity

saving may influence individuals willingness for electricity saving activities. Besides, media

promotion for environment protection and climate change may reduce residents unnecessary

electricity consumption. Yue et al. (2013) observe that women and older people have more

interpersonal interaction about energy conservations, compared to other groups.

7
 iii. Perceived behavioural control

Perceived behavioural control refers to ease or difficulty of performing particular behaviour. It

largely depends on the weighting of the costs and benefits in the process of performing specific

behaviour (Lindenberg and Steg, 2007). Household energy cost could influence home owners choice

of energy efficiency measures (Black et al., 1985). Home owners who perceive the energy cost to be

high may invest in energy efficiency measures if they believe that existing measures would not

sufficiently reduce energy cost. Besides, the comfort or discomfort (e.g. thermal comfort or air

quality) that residents felt when conducting certain kinds of electricity-saving behaviour have a

significant influence on their further energy saving activities (Banfi and Farsi, 2008). For example, the

need for greater thermal comfort may encourage investment related to space heating and insulation

(Berry et al., 1997; Herring et al., 2007).

iv. Residue effect

Residue effect refers to the past behaviour or experience of individuals, which may affect their

intention to perform particular behaviour (Ajzen, 1991). Previous investment in energy efficiency

improvements in the house might increase home owners confidence in further adoption of energy

efficient measures (Costanzo et al., 1986). However, past investments could also discourage further

adoption due to financial constraints or simply because home owners may believe that they have

sufficiently invested in energy efficiency.

According to Zografakis et al. (2010), those who have invested in some energy saving measures, or

the residents who had suffered electricity shortage before would intend to adopt more energy

saving measures. Feng and Sovacool (2010) also indicate that the residents who had the experience

of brownouts of electricity use in China would have more concern about electricity saving.

8
 c. Structural factors

Factors such as government subsidy and regional socio-economic conditions could influence

residential energy conservation investment decisions (Braun, 2010; Mahapatra, et al., 2008; Sadler,

2003).

i. Energy price inflation

Many researchers have stressed the importance of energy prices on the energy-saving behaviour of

households. The literature has plenty of studies demonstrating the statistically significant

relationship between energy price changes and the conservation measures that individuals are likely

to adopt (Black et al., 1985; Walsh, 1989; Long, 1993). Although it is commonly expected that energy

price inflation encourages conservation, there may be opposite cases. This happens because energy-

efficient equipment can be expensive at the time of purchasing and households tend to ignore that

energy-conserving appliances are less expensive in use (Schipper and Hawk, 1991).

ii. Policies and regulations tax credits & subsidies

Recent empirical research has focused on the impact of tax credits or subsidy schemes on household

energy efficiency behaviours. Some researchers argue that specific tax credits or subsidies do not

induce conservation activities (Pitts and Wittenbach, 1981; Held, 1983; Walsh, 1989). In contrast,

there are studies providing evidence for a positive relationship between tax credits or subsidies and

energy conservation activities. Cameron (1985) indicates that a government subsidy equal to 15% of

improvement costs would cause 3% of households to make some conservation improvement. Long

(1993) finds that households will spend more on energy conservation items when these investments

are subsidised by government tax policies.

III. Econometric framework

Following previous studies on energy-efficiency improvement behaviours (e.g., Olsen, 1981; Steg,

2008; Stern, 1992; Kang et al., 2012; Black et al., 1985; DeWaters and Powers, 2011; Dias et al.,

9
2004), a logistic model was chosen to examine the factors that influence household energy-

efficiency improvement behaviours, given the binary nature of the dependent variables available to

this study. The following specification was used:

(1)

where

is the binary variable with the value of 0 and 1

if households adopt energy efficiency improvement behaviour

if households do not adopt energy efficiency improvement behaviour

is the factor influencing household energy-efficiency improvement behaviours, including

socio-demographic factors, psychological factors and contextual factors

is the vector of parameters to be estimated

is the random error term (assumed to follow a standard normal distribution).

IV. Data

a. The HECS survey

The ABS 2012 Household Energy Consumption Survey (HECS) aims to capture the energy

consumption and expenditure patterns of households. It surveyed approximately 12,000

households between January and December 2012.

The scope of the survey was usual residents of private dwellings in urban and rural areas of Australia

(very remote areas were out of scope). This accounts for close to 97% of the Australian population.

The sample was collected using a stratified, multistage clustered design. The following table shows

the distribution of the final samples between states and territories and between capital cities and

the rest of state.

The HECS collected a large number of energy related items ranging from energy sources,

expenditure, consumption, behaviours, perceptions as well as dwelling characteristics and

10
household heating and cooling practices. The research covered in this paper focuses on energy

behaviours, principally, energy efficiency modifications made to the dwelling in the last 2 years and

intentions of the household to make energy efficient modifications in the next 12 months.

Modifications include one or more of the following items: replacing electric hot water system with

gas hot water system and installing solar hot water system, solar electricity (PV panels), insulation,

ceiling fans, double glazed /louvre windows, tinted glass or solar guarding, heavy curtains or blinds

that improved energy efficiency (e.g. blockout, honeycomb, venetian), outside awnings/shutters that

improved energy efficiency and replacing appliances for more efficient models (ABS, 2013). Along

with these detailed energy variables, the survey also collected socio-demographic information, some

of which were used in the modelling.

Table 2: Distribution of survey sample

Capital City Rest of State Total Proportion (%)
Households (no.)
NSW 1,248 804 2,052 17.13
Vic 1,136 909 2,045 17.07
Qld 850 849 1,699 14.18
SA 1,023 1,001 2,024 16.90
WA 892 911 1,803 15.05
Tas 440 827 1,267 10.58
NT 347 62 409 3.41
ACT 679 0 679 5.67
Australia 6,615 5,363 11,978 100.00

b. Variable description

Following previous studies on energy efficiency improvement behaviours (e.g., Olsen, 1981; Steg,

2008; Stern, 1992; Kang et al., 2012; Black et al., 1985; DeWaters and Powers, 2011; Dias et al.,

2004) and based on the modelling framework provided in the previous section, a set of variables

were chosen to identify the factors associated with household energy efficiency improvement

behaviours.

11
 i. Dependent variables

In this analysis the household energy-efficiency behaviours were represented by type of

modification made to dwelling in previous 2 years and type of modification intended in the next 12

months. The responses received from the households show that out of the 11978 households,

5,242 households (43.76%) have made at least one type of modifications in last two years, and 2,587

(21.60%) are intending to make at least one type of modifications in the next 12 months. There are

1,590 households (13.27%) who have made at least one type of modifications before and intend to

make more modifications in the coming 12 months. Therefore the binary variables of enef_moda

(1= modification made, 0= modification havent made) and enef_modi (1= have intention to

make modification, 0= have no intention to make modification) were used as the dependent

variables.

ii. Independent variables

This analysis focused mainly on the effect of socio-demographic and psychological factors on

household energy efficiency improvement behaviours, given the nature and data availability of the

HECS datasets.

The socio-demographic variables include measures of family income level and composition,

indicators of household reference person characteristics (e.g., age, sex and occupation), components

of current dwelling characteristics, (e.g., home ownership, dwelling structure and age, number of

bedrooms), existing dwelling energy efficiency characteristics (window treatment, solar hot water

system and insulation treatment) and geographical location.

The psychological factors include households energy saving attitudes represented by curtailments of

energy consumption the household members are currently taking (i.e. taking short showers, using

cold water for all or most clothes washes, drying clothes on a washing line for all or most washes,

switching off chargers for rechargeable appliances when not in use, etc.), perceived behavioural

control measured by household total weekly energy expenditure, and the residue effect indicated by

12
type of modification made to dwelling in previous 2 years (this variable is only included in the

modification intention model).

Some data transformations were undertaken prior to modelling. The logarithmic values of weekly

disposable household income and household total weekly energy expenditure were used to reduce

skewness and to avoid potential exponential growth patterns of these two variables. This meant

around 135 observations had to be dropped (out of 11,978 observations), due to negative or 0

values in their weekly disposable income and weekly energy cost. Other explanatory variables were

transformed to either binary or categorical variables. The descriptive statistics for both the

dependent and independent variables used in this analysis are presented in Table 3.

13
Table 3: Variables included in this analysis: descriptive statistics
Variables Type Scales Proportion (%)
Dependent variables
Modification action Binary 1= modification made 43.95
enef_moda 0= modification havent made 56.05
Modification intention Binary 1= have intention to make modification 21.71
enef_modi 0= have no intention to make 78.29
modification
Independent variables
Family composition Categorical 1= "parents with children" 31.75
dcomphh2 2= "couples only" 28.91
3= "lone person" 25.68
4= "others" 13.66
Occupation Categorical 0= "others" 32.73
of HH ref person 1= "managers" 11.19
occrh 2= "professionals" 27.43
3= "service workers" 28.65
Age of HH ref person Categorical 1= "34 years old and below" 18.42
agerh 2= "35 to 44 years old" 19.26
3= "45 to 54 years old" 20.75
4= "55 to 64 years old" 20.43
5= "65 years old and above" 21.14
Sex of HH ref person Binary 1= male 58.06
sexrh 0= female 41.94
Home ownership Binary 1= "owner" 68.25
tenureh 0= "renter and other types" 31.75
Dwelling type Binary 1= "house" 81.34
dweltyph 0= "others" 18.66
Dwelling age Categorical 1= "less than 10 years" 16.51
enef01 2= "10 to 30 years" 33.00
3= "more than 30 year" 48.97
4= "don't know" 1.53
Geographical location Categorical 1= "NSW" 2= "Vic" 3= "Qld" 4= "SA" See table 1
state06 5= "WA" 6= "Tas" 7= "NT" 8= "ACT"
Energy saving attitudes Binary 1= "5 and more actions taken to reduce 65.52
enef18 energy cost"
0= "less than 5 actions taken to reduce 34.48
energy cost"
Insulation treatment Binary 1= "insulation in dwelling" 73.95
hhinsula 0= "no insulation in dwelling" 26.05
Window treatment Binary 1= "has window treatment" 91.48
enef04 0= "no window treatment" 8.52
Solar hot water system Binary 1= "has solar system" 17.55
shwsele 0= "no solar system" 82.45

Other variables Type Mean SD

Disposable weekly income Continuous 1501.14 1202.48
dispsch8
Total weekly energy cost* Continuous 104.09 83.96
totenexp
Bedroom numbers Continuous 3.09 0.90
nbedh
Note: * Total weekly energy cost includes both energy and fuel consumption.

14
 V. Empirical model and results

Two separate econometric models were estimated to identify the factors that drive household

intentions and actual actions to adopt energy-efficiency modifications to their dwellings.

Given the binary nature of the dependent variables, a logistic regression approach was used. The

explanatory variables used in the two models are slightly different due to the nature of these

variables, i.e. one model is capturing past actions and the other capturing future intentions.

For the household modification action model, energy cost was not included as an explanatory

variable, given that the dependent variable is the modification actions in the last two years, while

the energy cost data collected in HECS is current cost. Therefore the energy cost was only included in

the intention model to avoid potential measurement error. For the household modification intention

model, the modification action variable (enef_moda) was included as an explanatory variable to

analyse the possible impact of previous investment experience on future investment motivations.

The following two empirical models were therefore used:

Modelling actual modification actions:

( )
{ ( )
}

(2)

Modelling modification intentions:

( )
{ ( )
}

(3)

where

is the natural log

( ) is the probability of the household actually making modifications in the

last two years

15
 ( ) is the probability of the household having intention/s to make

modification/s in the next 12 months

is the regression coefficient of the factor included

is the random error term (assumed to follow a standard normal distribution)

The estimated coefficients and corresponding standard error values for both models are displayed in

Table 4. The correctly classified per cent concordance values of 65.25% and 78.35% for both models

respectively show that the variables included have statistically significant contribution to the

prediction of the outcome.

In general, the results obtained appear to be consistent with those observed in the literature. They

indicate that socio-demographic factors like household income levels, family composition, age of

household reference person, home ownership, dwelling type and age, and geographical location

have statistically significant association with the intention to have, or to actually adopt, energy

efficiency modifications. This can also be seen for psychological factors of household energy

efficiency attitudes and perceived behavioural control and past investment experiences. It is also

worth noting that the direction and degree of significance of these factors differ between the actions

and intention models. However, unlike many previous research studies, occupation and sex of

household reference person, the number of bedrooms, and window and insulation treatments were

not statistically significant in both the actions and intention models.

The estimation results show that some of the above factors have positive, negative or mixed effects

on modification actions and intentions.

Factors with positive effects

This analysis confirms previous studies finding that household income has a positive effect on

energy efficiency investments. The likelihood of actually making modifications or intending to have

modifications in the near future increases with income.

16
Table 4: Parameter estimates for the logistic regression models
Dependent variable:
Modification action Modification intention
Independent variables coef se coef se
Income level 0.157*** 0.032 0.072* 0.038
Family composition (base=parents with child)
Couples only -0.120** 0.060 -0.078 0.068
Lone person -0.443*** 0.068 -0.035 0.082
Others -0.230*** 0.069 -0.252*** 0.082
Occupation of HH ref person (base=others)
Managers -0.074 0.085 -0.111 0.102
Professionals -0.068 0.072 0.024 0.086
Service workers -0.111* 0.066 -0.042 0.082
Age of HH ref person (base=34 years old and below)
35-44 years old 0.126* 0.069 -0.187** 0.078
45-54 years old -0.004 0.068 -0.268*** 0.077
55-64 years old 0.086 0.073 -0.559*** 0.085
65 years old and above -0.247*** 0.087 -1.203*** 0.109
Sex of HH ref person (Male=1) -0.047 0.042 -0.020 0.050
Home ownership (Owner=1) 1.297*** 0.052 1.103*** 0.073
Dwelling type (House=1) 0.215*** 0.065 0.131 0.083
Bedroom numbers 0.022 0.028 -0.042 0.034
Dwelling age (base= less than 10 years)
10-30 years old 0.521*** 0.061 0.101 0.073
More than 30 years 0.497*** 0.059 0.173** 0.070
Not sure -0.075 0.217 -0.293 0.294
Geographical location (base=New South Wales)
Victoria -0.029 0.068 -0.102 0.082
Queensland 0.064 0.072 -0.094 0.087
South Australia 0.184*** 0.068 0.097 0.081
West Australia 0.119* 0.071 0.038 0.085
Tasmania -0.095 0.078 0.168* 0.092
Northern Territory 0.149 0.120 -0.253* 0.153
Australian Capital Territory 0.038 0.096 0.015 0.112
Attitudes 0.337*** 0.043 0.276*** 0.052
Energy cost 0.089** 0.040
Past investments 0.623*** 0.050
Existing characteristics
Window treatment (Yes=1) -0.136 0.091
Solar hot water system (Yes=1) -0.121* 0.063
Insulation treatment (Yes=1) 0.047 0.069
_cons -2.941*** 0.244 -2.989*** 0.322
Pseudo R2 0.095 0.087
Per cent Concordance 65.25% 78.35%
note: *** p<0.01, ** p<0.05, * p<0.1

17
As expected, the home ownership factor is positively related to modification motivation and action,

indicating that home owners are more likely to invest in energy efficiency improvement practices.

This could be due to many reasons. Firstly, people living in rented accommodation might not have

the right, as tenants, to make modifications to the homes. Secondly, home owners gain the personal

benefits of investment, either by energy savings, increase in property values etc., whereas renters

are not likely to invest money in improving the energy efficiency or value of their landlords

property. Finally, conservation practices are less likely to be adopted by renters because their

expectations, as far as the rate of return on their investments is concerned, are relatively low due to

a shorter tenure in their dwellings.

Similarly, dwelling type has a strong positive impact on household modification actions, indicating

that the households living in a house are more likely to conduct energy efficiency modifications

compared to those in an apartment or townhouse. However, the statistical significance level of this

impact on households modification intention is smaller.

A dwelling age of more than ten years increases the likelihood of the household implementing

energy efficiency measures. For modification intentions, it seems that only owners of the dwellings

of more than 30 years old are more likely to consider modifications. This result is consistent with

Nair (2010)s conclusion that households living in older houses are more likely to undertake retrofit

measures because old houses may be in physically or aesthetically poorer condition, requiring the

installation of new energy efficient components.

The positive relationships observed in both models between household energy efficiency attitudes

and the modification actions and intentions also confirm the expectation that a positive attitude

towards the environment may encourage the motivation and then adoption of energy efficiency

measures, and the greater the perceived seriousness of the problem, the more likely one should be

to support strategies for promoting energy conservations.

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Factors with negative effects

Most of these effects are differences in the likelihood of doing or planning modifications between

the reference group and others. The estimation results of the two models show negative impacts of

family composition on energy-efficiency modification patterns, indicating that compared to the

families with dependent children, lone person households and the couples only families have

adopted less modification investments in past and are less willing to make more modifications in

future.

Factors with mixed effects

The age of household reference person has mixed effects on the likelihood of modification actions

and intentions. The results from the second model show that those above 35 years old are less likely

to have modification intentions compared to the younger cohorts. The likelihood of not intending to

have modifications increases with age. The results from the first model, however, show that only the

older cohort (more than 65 years old) is significantly less likely to have modification actions, while

the 35-44 years old cohort is the most proactive in adopting energy efficiency modification.

The results also show mixed effects of the geographical location variable. It appears that households

in SA and WA were mostly likely to have made modifications, while households in Tasmania are

more likely to have intentions to make modifications. Households in NT are less likely to have

intentions to modify, compared to NSW and the other States.

Other variables in the intention model

For the explanatory variables that are only included in the second model, the results also show

mixed outcomes.

Consistent with previous studies, the results from the intention model show that energy cost has a

statistically significant positive effect on the likelihood of intending to make modifications. They also

show that past investment experience in energy efficiency improvements has a positive effect on the

19
likelihood to have intentions to make further modifications in the future. This observation is

consistent with previous studies which showed that those who have invested in some energy saving

measures in the past would intend to conduct more energy saving actions in the future.

The results for window and insulation treatments are not statistically significant, but already having

a solar hot water system decreases the likelihood of having intentions to make future modifications.

This is consistent with previous studies which said that more efficient homes are less likely to

conduct more modifications in the future.

VI. Conclusion and future research

This study analysed the factors associated with the likelihood of households implementing or

intending to implement energy efficiency actions. The results can provide important insights into

the profile of households and their behaviours with respect to conservation and efficiency measures.

The results showed that modification actions are more dominantly impacted by socio-demographic

factors, whereas modification intentions are influenced more by psychological factors.

The study has limitations that are noted for future improvements. Firstly, the model for

modification actions assumes that the there are no significant measurement errors due to the two

years gap between the dependent variable (actions undertaken in the last two years) and the

independent variables (current characteristics). Secondly, due to the unavailability of data related to

structural factors such as government subsidy, tax credits and energy prices, this analysis is unable

to investigate the influence of macroeconomic conditions and policy measures on household

decisions to adopt energy efficiency measures. Future research should take these into account.

20
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