Attitudes, Knowledge and Behavior of American Consumers Regarding. Energy Conservation With Some Implications For Governmental Action

Jeffrey S. Milstein, Federal Energy Administration
ABSTRACT - American consumers, who use one-third of our energy, favor energy conservation, but generally do not practice it. This paper presents empirical data and analyses of psychological, cultural, economic, and political reasons for this; indicates effective incentives and motivations for conservation; and spells out the implications for governmental policy and action.
[ to cite ]:
Jeffrey S. Milstein (1977) ,"Attitudes, Knowledge and Behavior of American Consumers Regarding. Energy Conservation With Some Implications For Governmental Action", in NA - Advances in Consumer Research Volume 04, eds. William D. Perreault, Jr., Atlanta, GA : Association for Consumer Research, Pages: 315-321.

Advances in Consumer Research Volume 4, 1977   Pages 315-321

ATTITUDES, KNOWLEDGE AND BEHAVIOR OF AMERICAN CONSUMERS REGARDING. ENERGY CONSERVATION WITH SOME IMPLICATIONS FOR GOVERNMENTAL ACTION

Jeffrey S. Milstein, Federal Energy Administration

[The findings and interpretations in this document should not be interpreted as necessarily representing the official policies, either expressed or implied, of the Federal Energy Administration or the U.S. Government. For additional information, contact Jeffrey S. Milstein, Director, Marketing Research; Office of Energy Conservation and Environment; Federal Energy Administration; Washington, D.C. 20461.]

[The author wishes to thank Joanne Bakos and Jill Lady for their help in preparing and editing this document.]

ABSTRACT -

American consumers, who use one-third of our energy, favor energy conservation, but generally do not practice it. This paper presents empirical data and analyses of psychological, cultural, economic, and political reasons for this; indicates effective incentives and motivations for conservation; and spells out the implications for governmental policy and action.

THE CONSUMER AND AMERICA'S ENERGY PROBLEMS

In balancing American energy demands with available supplies, thereby reducing American dependence on foreign oil imports, which proved unreliable during the embargo, American consumers play an important role. Almost a third of the energy used in the United States is consumed by people in their homes (20%) and automobile (12%). Another 15% is used in the commercial sector, 41% in the industrial sector, and an additional 12% in the non-automobile transportation sector.

There are specific behaviors in homes and cars that consume the greatest amount of energy. City driving accounts for 55 percent of all miles driven by consumers. Within the home, an average 53 percent of the energy is used for space heating, and 15 percent for water heating, 6 percent for air-conditioning, 7 percent for refrigeration, 5 percent for cooking, and 11 percent for lighting, clothes drying, and other uses.

If consumers are to conserve energy effectively, they must choose and use their purchases much more wisely. They must buy more insulation and more efficient cars and appliances. And they must use their cars more efficiently: carpooling, driving at slower speeds, etc. They must use their appliances more efficiently in off-peak hours. Consumers must set their heating thermostats lower and their air-conditioning thermostats higher.

But American consumers are reluctant to change their behavior to save energy. This paper seeks to explain why by analyzing and interpreting empirical data gathered by FEA. It will also explain how these answers can be used in designing effective governmental policy.

DATA SOURCES

[The references to specific data contained in the body of this paper can be found in the reference section at the end. Survey data can be found in the Opinion Research Corporation studies. Information from focused group discussions can be found in the Bee Angell and Associates and Gallup Organization studies.]

The Office of Energy Conservation and Environment of the Federal Energy Administration directed contractors to do research on consumer attitudes, knowledge, preferences, motivations, and behavior regarding energy conservation. The research is of two types: national probability sample surveys and focused group discussions. Surveys, of 1,000 to 1,200 people each, were made monthly from August 1974 to April 1976 in the 48 contiguous States. Each respondent was interviewed by telephone for 12 to 20 minutes. A total of 18 focused group discussions were held in Denver, Trenton, Hartford, Seattle, Chicago, and Nashville. In each case, trained leaders led 10 to 12 people in discussions that lasted from 1 1/2 to 2 hours.

AWARENESS OF THE ENERGY PROBLEM

A majority of the public is aware of the Nation's energy problems. In April 1976, those surveyed responded fairly knowledgeably to the question, "In general, what is your understanding of what the energy problem is all about?".

TABLE I

CONSUMERS' UNDERSTANDING OF THE ENERGY PROBLEM

People are aware that the demand for energy exceeds the supply and that it is important to conserve. But note that only 5 percent of the public mentioned U.S. dependence on foreign supplies; yet the Arab oil embargo is what precipitated the energy crisis three years ago.

Note also that 30 percent of the public still does not understand either what the energy problem is or that there is an energy problem. Among those who have not completed high school the percentage is 41. The trend, however, is toward a greater public understanding that the energy problem is real. Just after the embargo ended, fewer than one-third of the people thought that the energy shortage was real.

We must be concerned with the public's understanding of the energy problem because consumers will not conserve unless they know how and why they should. Americans do not realize how dependent they are on foreign imports or that the amount imported has actually increased from 38 percent at the time of the embargo to 43 percent today. Consequently it will be difficult to induce the public to accept any foreign policy decisions that are designed to reduce our imports. Perhaps even more important, such unawareness relieves the consumer of a compelling reason for saving energy.

ATTITUDES AND BEHAVIOR

Energy conservation is now an "apple pie" concept--virtually everyone is for it but in the abstract. In February 1976, when asked in a national survey "How serious is the need to save energy?", 45 percent said very serious, 39 percent said somewhat serious, 5 percent had no opinion and only 11 percent said not at all serious. Moreover, 74 percent of the people queried in September 1975 thought that personal conservation efforts have a real effect on the total amount of energy used.

People are saving some energy in their homes and cars. Actual consumption in these areas is about one-tenth lower than the amount predicted if Americans had continued their energy consumption growth rate in the decade prior to the Arab oil embargo of 1973-74. But there is a great discrepancy between lip service and action. In April 1976, 76 percent of the people surveyed said they prefer to cut down on their car's fuel consumption by sharing a ride to and from work, but in December 1975 only 10 percent said they do share rides. Forty-seven percent said they prefer to use a bus or train rather than a car, but only 8 percent said they took a bus or train to work. And 76 percent say they prefer to drive no faster than 55 mph on an open highway. We can judge from our own experience the actual speed most people drive.

A similarly large majority (53-91 percent) say that they prefer to walk rather than drive to places within a half-mile from where they are, to tune their engines, to buy radial tires, to install weatherstripping and caulking, to buy insulation for their attics and storm windows and doors, to use cold water detergent, to service their furnaces, to set their thermostats lower than 68 degrees in the day and 60 degrees at night, and to set their air-conditioning thermostats no lower than 78 degrees in the summer. But we must question how much these statements of preference are translated into actual behavior.

That American consumers have a long way to go in developing specific energy conserving behaviors can be seen from the following table, which is based on surveys made in December 1975 and January 1976. The true percentages may be even lower than the table indicates; evidence shows that people may not report their own behavior accurately.

TABLE 2

ENERGY-CONSERVING BEHAVIORS OF CONSUMERS

People like to think that they are contributing to energy conservation, so they take the energy-saving steps that involve little inconvenience. They turn off lights when they leave a room. This ritual leaves their consciences free to drive alone to work (it's so much more convenient) or heat their homes to higher temperatures (it's so comfortable).

People are apparently taking a middle position on energy efficiency in their automobiles. Measuring car purchasing behavior, the following table shows new car sales. ["Ward's Automotive Statistics," Sept. 1976.]

TABLE 3

TREND IN PURCHASES OF NEW CARS

The trend in actual purchasing is clearly towards intermediate and compact size cars with sub-compact and full-size cars becoming the minority.

WHY PEOPLE ARE NOT SAVING ENERGY: LACK OF KNOWLEDGE

Many consumers do not really know how to save energy. For example, 36 percent of the people surveyed in January 1976 do not even know that lower-wattage light bulbs use less electricity (even though turning out lights is the one energy-conservation action that a majority of people perform). Fifty-nine percent of the people incorrectly think that keeping a light bulb on uses less energy than turning it off several times an hour. Forty-six percent do not know that over the year the water heater uses more energy than any other appliance in the home. Forty-two percent of the people do not know where their water heater control is, and 42 percent of the people whose water heater have controls do not know its setting. Fifty percent of the people do not know that it takes less gasoline to restart a car than to let it idle for a few minutes. Only 13 percent think their insulation is inadequate, although by objective standards the actual inadequacy is much higher.

WHY PEOPLE ARE NOT SAVING ENERGY: THE COMFORTABLE, CONVENIENT AFFLUENT SOCIETY

The focused-group research done for FEA suggests that Americans have cultural norms that militate against reducing their use of energy. Americans place a high value on indulging their comforts and conveniences, living for today rather than for the future, materialism, and success defined in terms of conspicuous consumption. People work and save in order to become rich. But once rich, they want to publicize their success with energy-consuming material goods and activities. People resent being told that they must forgo the success symbols that, according to American mores, is the reward for their work.

The materialistic American dream, while dominant, is not universal. Young adults show a concern for the quality of life as well as material success. They would like to see a restructuring of social values so as to stress simplicity, independence of technology, and conservation in a larger sense. But, they do not see energy conservation itself as being particularly constructive.

Teenagers, though angry at the adult world for handing them the energy problem while the adult world goes about doing its own thing, are themselves primarily interested in doing their own thing--having a good time--and feel that the responsibility for solving the energy problem is not theirs but that of adults.

Children (7-12 years old) also feel that adults have the major responsibility for energy conservation--not themselves. They see adults as indulgent, but do not reject this behavioral model. They are already socialized to the American dream. Their primary concern is their ability to enjoy their own future.

WHY PEOPLE ARE NOT SAVING: SKEPTICISM AND CYNICISM

Contributing to a diminished energy conservation effort on the part of the American public is their skepticism and cynicism regarding the nature of the energy problem. People in focused groups in the fall of 1975 perceived politicians as struggling to use the energy problem to enhance their own power and prestige, rather than acting to cope with the problem itself, and oil companies and utilities as using the energy crisis to enrich themselves. About one-third of the surveyed public think that the consumers' own demands caused the energy problem. But, another third think it is caused by big business, particularly the oil companies; and another third, politicians and the government--including both Congress and the Administration. As of September 1975, only 3 percent of the public thought that the energy shortage was caused by the foreign oil producing countries. Consequently, people do not feel that information about energy is credible if it comes from either government or industry. (They place much more trust in information that comes from consumer groups.)

Moreover, people are frustrated because their fuel, electricity, and gasoline bills have risen despite their attempts to save energy. People are thus unwilling to make personal sacrifices because they are not sure that the need is genuine; that the burden of sacrifices will be carried equitably by industry, the government, and consumers; and, that others will not profit economically or politically from their attempts to conserve. Since the end of the embargo about one-third of the public has continued to believe that the energy crisis and subsequent energy problems are contrived.

WHOM PEOPLE BELIEVE

Consumers get most of their information about the energy problem from television (42 percent of the public) and newspapers (45 percent) and believe the information given by consumer organizations more than that of business or the government.

TABLE 4

GROUPS PEOPLE RELY ON FOR ENERGY CONSERVATION INFORMATION

Given this background of indulgence, skepticism, and the incredibility of the major institutions of Government and business, we must ask what is it that will lead and motivate people to save energy.

INCENTIVES FOR SAVING ENERGY

We cannot instill in Americans an energy conservation ethic as such because people are not interested in saving energy for its own sake. Nor will they save out of patriotism or concern about their progeny. The chance to save money is the most effective incentive in inducing a consumer to conserve energy. In the focused group discussions, homeowners said that they do turn down their thermostats and that they have their homes insulated--but only in order to reduce their bills. People who carpool cite the parking savings as the reason.

In February 1975 people who said that they or their family were making a little effort to save energy (95 percent of the total) were asked why. In response to this open-ended question, 59 percent of the people cited cost, 17 percent cited shortages of energy and the Nation's running out of resources, 11 percent cited their responsibilities as citizens, 6 percent said it would help the economy, 10 percent cited other reasons, and 5 percent did not know or had no answer. Thus, people conserve energy mainly to save money.

In February 1975 respondents were asked the psychologically projective question of why people do not try to save energy. The answers reflect consumers indifference, skepticism, and indulgence. Forty-four percent said that people do not care or are selfish. Thirty-seven percent said there really is not a shortage and saving is not necessary. Fourteen percent said it was too hard or causes inconvenience. Five percent said people do not know what to do. Two percent said individuals' actions do not have much impact. Nine percent gave other answers and 8 percent did not know.

Note that the financial motivation has nothing to do with a conservation ethic as such. Rather, its a pragmatic response to economic pressure. If lowering the thermostat or carpooling helps one to save money so that one can continue to be indulgent in other ways, then saving energy is rewarding and gratifying. Otherwise, it causes discomfort, inconvenience, or other deprivations. The amount of money saved is the only meaningful measure of energy conservation to those whose motive is financial. Information and tips on how to save energy are meaningful to those people only if they have a dollar sign attached to them.

EXPERIMENTAL BEHAVIOR ANALYSIS OF ENERGY CONSERVATION

Many research groups other than FEA have done experimental analyses of energy conservation. These studies show that the most effective means of modifying energy-using behavior is financial reward, the second most effective is feedback of behavioral performance, the third most effective is exhortation, and the least effective is information on how to save energy.

Rewards or incentives in the form of cash payments have reduced driving 20 percent (Foxx and Hakke), and electrical use 29 percent (Hayes and Cone). In general, the greater the cash incentives, the more energy is saved.

Feedback, the second most effective means of getting people to save energy, has reduced electricity consumption in households by as much as 18 percent (Palmer, Lloyd, and Lloyd; Hayes and Cone). Feedback is accomplished by telling a consumer how much energy he has been using and how much it will cost him if he continues to use it at the same rate. A combination of cash incentives and feedback has reduced electrical use during peak hours (Kohlenberg, Phillips, and Proctor).

Exhortation or prompting was found to be less effective than either incentives or feedback. Prompting in the form of social commendation was found to be effective in reducing fuel oil consumption (Seaver and Patterson) and almost as effective as feedback in getting people to reduce their use of electricity (Palmer, Lloyd and Lloyd).

Information on energy saving or environmental consequences is the least effective means of inducing energy conservation (Cass). Neither information nor feedback enhances the results that are obtained when payments are used to induce people to save energy.

While many of these studies have been economically unrealistic (paying people to save energy), they do validate the importance of using the motive, the desire to save money, to induce people to save energy.

IMPLICATIONS FOR GOVERNMENTAL POLICY AND ACTIONS

What are the implications for governmental policy and action of these research findings on American attitudes, knowledge, and behavior regarding energy conservation?

The government should use incentives, feedback, exhortation, and information to influence peoples' energy-using behavior. Despite the fact that these four methods vary in their effectiveness, they are all acceptable to the public.

Effective exhortation by the government requires it to increase its credibility with the people. It must use as its spokesmen men and women who have no vested economic or political interest in energy, men and women who are perceived by the public as being expert in and knowledgeable about the energy problems that the country faces. These spokespersons should urge people to save our dwindling supplies of energy, reminding them that they can use tomorrow what they save today, and save themselves money in the process.

To further bolster its credibility, the government must lead by example and publicize how impressive its own energy conservation has been. Because people are reluctant to sacrifice unless they see others sacrificing, government should also publicize the conservation achievements of all classes of consumers and industry.

The government must accept the challenge of making people understand the energy problem. People must be made to realize that despite the lack of gasoline lines we are dangerously dependent on undependable foreign sources of oil. They must realize that we do not produce enough of our own oil and gas, that the supplies of oil and gas are finite, and that the world may run out of these resources in the not-too-distant future. These lessons can and should be taught in terms that are meaningful to Americans. If Americans place convenience and comfort ahead of energy conservation, they must be told how uncomfortable and inconvenienced they will be if the country is embargoed again or if our supplies fail to meet our demand. Then they must be told how to make our demand meet our supplies: the necessity of doing that which saves the most energy, e.g., insulating, carpooling, and setting thermostats down in winter and up in summer.

The Federal, State, and local governments must make use of the finding that a chief incentive for saving energy is the desire to save money. They can do this in a variety of ways. They can, and in some areas do, offer tax credits, low-interest loans, or loan guarantees to those who buy energy conserving household equipment such as insulation, storm windows, heat pumps, and solar energy systems. Federal, State and local governments that own or lease parking lots can allot free parking to those who carpool, and expensive parking to those who do not, and tax parking in commercial lots in a way that encourages carpooling. Governments can also tax cars in ways that reward those who drive energy-efficient vehicles. They can tax fuel and offset the burden placed on poorer people by granting them a special tax rebate. They can use tax incentives as a means of rewarding those who manufacture cars and appliance and who construct buildings that consume less energy. And State and local governments could strictly enforce the 55 mph speed limit law and impose heavy fines for its violation.

Government must, however, balance many factors in making use of financial incentives. Participants in an April 1976 survey were asked how they felt about different kinds of actions the government could take to encourage conservation: "There are a number of things the government can do to get people to cut down on how much gas, oil, and electricity they use. Would you tell me which of the following you favor and which you oppose?"

TABLE 5

POPULARITY OF POSSIBLE GOVERNMENTAL ACTIONS TO STIMULATE ENERGY CONSERVATION

It is clear that the idea of government using its powers to make energy more expensive or less available is unpopular. It is this very distaste for higher prices, and consequently the political reluctance to raise them, that has been a major cause of the slow pace of energy conservation in the United States as compared to that in Japan and Western Europe.

The table also demonstrates that people prefer policies and actions that are personally rewarding to those that are penalizing. People also prefer policies that require manufacturers and builders of appliances, cars and buildings to help consumers save energy.

The use of higher prices as an incentive to conserve energy has a built-in limitation and may generate serious social and political problems. Many people will be able to afford all the energy they want no matter how high the prices are likely to go. Those who will not be able to afford enough energy will not only sacrifice unfairly, they will probably resent the oil companies and utilities for raising their prices, the government for allowing the prices to rise, and the well-to-do for being able to afford the extra expense.

The government must make use of the finding that people respond to feedback, both because feedback is effective and because the table above suggests the people see this as a proper role for government. The feedback must allow people to see how much money and energy they are spending, and how much they have saved or could save compared to their previous consumption rates. It can require new homes and apartments to have a kind of utility meter that shows how much energy is being used and how much it will cost if the consumer continues to use energy at the same rate. It can require utility bills to project the monthly consumption to an annual cost. It can use television and newspapers much more than it has to keep people informed about how much energy the country is using, importing, and saving.

The government should continue to require the labeling of new cars and appliances so that people can know before they buy how many miles they will get from a gallon and how much they will have to pay per year for the energy needed to run a car or an appliance. FEA's April 1976 survey shows that such information does affect a consumer's choice: 82 percent of the people surveyed say they prefer a refrigerator priced at $400 that uses $40 worth of electricity a year to a refrigerator priced at $300 that uses $65 worth of electricity a year. The miles-per-gallon figures about cars that EPA and FEA publish are also effective. Of the people surveyed, half of those who had beard of the figures said that the figures would influence their choice of a new car.

The government can fund research to help develop new and more energy-saving devices that consumers can use. It can pass and enforce laws that require manufacturers to make more efficient appliances and cars and builders to construct buildings that are more energy efficient.

The final point that Government should consider in designing and implementing energy conservation policies is that, in the end, a major part of energy conservation comes down to what the individual consumer does. And this squares with what consumers themselves think. In June, 1975, when people were asked who could do the most to ease the energy crisis, 36 percent cited the individual, whereas only 21 percent cited the federal government, and only 8 percent cited business, industry, or the oil companies. Public feeling on this point has not changed since then. American consumers believe that a part of the solution to this Nation's energy problem lies in their own hands. They are right. The government can help by providing the incentives and information that will lead more people to conserve energy.

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