ARTICLE IN PRESS

Energy Policy 35 (2007) 4381–4390

www.elsevier.com/locate/enpol

Towards a contemporary approach for understanding consumer

behaviour in the context of domestic energy use
Adam Faiers,1, Matt Cook, Charles Neame
School of Applied Sciences, Cranfield University, Silsoe, Beds. MK43 0AL, UK
Received 23 July 2006; accepted 4 January 2007
Available online 23 April 2007

Abstract

Domestic sector energy use is increasing in the UK and currently accounts for 30% of total use. Policies of liberalised energy markets
have allowed greater consumer choice but have not sought to reduce carbon emissions. Overall sales of energy efficiency products are
rising, but UK housing stock standards are poor and do not facilitate improved efficiency and further, the sales of such products are
influenced by their price, thus the higher capital costs of products such as boilers and solar systems make them initially unattractive to
consumers. Previous market-based research into the adoption of energy efficiency products has often focused on single factors, for
example demographics. This has limited the ability of policy makers to make informed decisions that address a broader range of factors,
such as individuals’ cognitive abilities, values and attitudes, as well as external factors such as social networks, marketing, and products
and services. This paper provides a wider critique of the theoretical base related to consumer behaviour, product attributes and socio-
environmental theories that relate to energy use. The aim of the paper is to draw together theories relevant to energy use in order to aid
policy making in the broader context and to develop the discussion around integrated theories of consumer behaviour.
r 2007 Elsevier Ltd. All rights reserved.

Keywords: Energy efficiency; Adoption of innovations; Consumer choice

1. The case for carbon reduction and energy efficiency
During the period 1990–2004, energy use in the domestic
sector increased by 18% to account for just over 30% of
the UK final energy consumption. Domestic energy is used
for space heating (58%), water heating (24%), and lighting
and appliances (18%). The source of the energy used is
predominantly from carbon fuels, such as gas, or electricity
generated in large-scale power stations (DTI, 2004).
European governments have been implementing policies
that encourage the adoption of energy efficiency in the
home through incentives and regulation. In addition,
consumers have been able to exercise choice in the energy
market due to liberalisation of the electricity and gas
markets, allowing them to choose more easily from whom
they receive their supply of energy, and also whether or not
Corresponding author. Tel.: +441525237569.
E-mail address: a.j.faiers.s02@cranfield.ac.uk (A. Faiers).
1
Current address: 4, Pinkle Hill Road, Heath and Reach, Bedfordshire,
England LU7 0AG, UK.
it has been generated from renewable sources. Legislation
has also facilitated consumer investment in domestic-scale
energy generation systems (solar thermal or photovoltaic
systems for example) as utilities are required to buy any
excess energy generated (DTI, 2001). Consequential effects
of the ease to switch suppliers, foe example, the UK
‘28-day rule’, has meant that utilities have been unable to
offer customers a package of energy services, for example,
installing energy saving measures and charging consumers
based on the savings that they made as a result, however,
legislative changes in 2003 in the UK have since enabled
this (DTI, 2005).
In 2002, the government in the Netherlands, which had
the highest level of consumer demand for green power in
Europe at the time, sought to further the adoption of green
energy products and their use by developing a virtuous
circle whereby funding to stimulate the market increases
demand for products, the demand leads to a reduction in
costs, and as a consequence, reduced costs stimulate
further investment in the products, which leads to greater
demand. As a consequence of this, there was a total

0301-4215/$ - see front matter r 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.enpol.2007.01.003
 ARTICLE IN PRESS
4382 A. Faiers et al. / Energy Policy 35 (2007) 4381–4390
increase of 675,000 customers for green energy between
1995 and 2002, with premiums for green electricity falling
to in some cases either zero premium or even green
electricity cheaper than electricity generated by conven-
tional fossil fuel-based processes (Bird et al., 2002).
An overview of the market for heating systems in the UK
shows that the uptake of measures that increase the
efficiency of energy use has been increasing. In August
2004, the UK market for energy efficiency products was
worth £5783 million, which was made up of thermal
insulation products, high efficiency central heating systems
driven by SEDBUK ‘A’ rated boilers, and double glazing
and conservatories. Over the 5 years to 2009, it is expected
that while growth in double glazing products and central
heating will remain stable, the growth for insulation
products will be strong, based on the legislative require-
ments for improved insulation of newbuild property
(Mintel, 2005).
However, legislation is not always an appropriate driver
for improvements as the choice to improve energy
efficiency performance is dependant on the householder.
For example, it is estimated that 90% of homes have some
insulation fitted, but not to the level of insulation that
would be required for a newbuild property under the
Part L building regulations 2006, which require 200 mm of
loft insulation to be fitted (Mintel, 2005). Despite current
low capital costs and rapid simple pay-back, it is estimated
that in 2003 only 6.4 million households in the UK had
cavity wall insulation out of a potential market of 17.8
million households with cavity walls. Whilst loft insulation
has penetrated the market, with estimates of 74% of all
households having loft insulation in 2003, the level of
insulation varies significantly with 85% of households
having less than half the recommended amount of
insulation fitted (Mintel, 2005).
Despite the example of the Netherlands and the other
factors affecting energy consumption such as the liberal-
isation of the market, higher taxation on fossil fuel
generation, and voluntary targets for the industry, green
power generation on the whole remains low and the
virtuous circle desired, for example by the Netherlands, has
failed to develop past an initial stimulation of the market
(van Rooijen and van Wees, 2006). Despite incentives and
policy measures, domestic level renewable energy systems
currently available, such as domestic solar hot water and
photovoltaic systems have not penetrated the market
sufficiently so as to become significant and be reported in
annual market reports such as Mintel (2005). In conclu-
sion, whilst legislation seeks to promote the use of energy
efficiency products, the rate at which they are being
adopted is not making a significant impact on the reduction
of carbon emissions needed to meet current targets through
the Kyoto Protocol. This suggests that while some house-
holders are proactive in adopting energy efficiency
measures, a key research question remains as to under-
standing what factors are preventing others from making
similar decisions.
2. Understanding environmentally sensitive behaviour in
order to aid policy decisions
Factors understood to determine demand for energy
efficiency measures typically include the cost of installation
and the simple pay back period, i.e. the period before a
return on the original investment is accrued. Market
research shows that consumers are generally only willing
to install measures providing the return on investment is
relatively rapid (Faiers and Neame, 2006). However, simple
payback periods vary significantly and do not generally
account for future changes to the cost of energy, future tax
implications on energy, or other changes affecting currency
values. Examples show that the successful adoption of
green energy occurs when the availability of the products is
high, they are aggressively marketed, and competitive with
other energy products, as is the case in the Netherlands and
Sweden. Pricing remains a critical issue, although retail
competition has stimulated the market to an extent.
However, marketing activity has been slow to develop
awareness and education (as reviewed by Salmela and
Varho, 2006), which is considered to be one of the critical
factors in adoption (Bird et al., 2002).
Previous investigations that were seeking to profile
potential eco-consumers have based their methodology
on demographic data. However, the results of these
research projects are often either inconclusive or incon-
sistent with each other. For example, in separate projects
investigating the impact of education levels, Straughan and
Roberts (1999), Vlosky et al. (1999), and Pedersen (2000)
all concluded that individuals with ‘higher’ education are
more likely to exhibit environmentally positive buying
behaviour. However, later evidence from Peattie (2001),
and Laroche et al. (2001) found that consumers of
ecologically compatible products tended to be less edu-
cated. Straughan and Roberts (1999) also concluded that
characteristics of age, gender and income, which may in
earlier research have been found to have some correlation
to stated ‘green’ consumption, on further analysis are
unlikely to actually influence positive eco-behaviour.
Historically, it may be that research utilised demo-
graphic data because it was accessible. Morris (2004), for
example, found that although the research methodologies
of a range of micro-sociological studies of participation
purport to assess the cognitive processes involved, they
actually utilise data regarding physical factors such as
available resources, age, and income. Hence, this supposes
that if specific demographic factors do not differentiate
consumer behaviour, then other factors must prevail. This
presumption makes certain theories and approaches less
robust and in need of review, for example, those general-
isations based on demographics by Rogers (1995) and is
supported through Jackson’s comprehensive review of
consumer behaviour in the context of sustainable develop-
ment (Jackson, 2004).
Models have been developed over time to explore a
range of issues relevant to how individuals act in relation to
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A. Faiers et al. / Energy Policy 35 (2007) 4381–4390 4383

environmentally sensitive buying. These include for exam- Table 1

ple, the buying process (Peattie, 1992), attitude formation Overview of relevant theories and models
(Schiffman and Kanuk, 1997), and recently, Bagozzis’ Consumer choice Post-Keynesian Theory
model of consumer action (reviewed by Jackson, 2004) and Behaviour Economic Theory
an attempt to explain causal links between values and Hierarchy of Needs
behaviour, by Thøgersen and Olander (2002). Needs, values and attitudes Personality Theory
A wide range of models and theories has recently been Control Theory
subject to a very thorough review by Jackson (2004) who Self-Discrepancy Theory
adequately demonstrates that beyond cognitive assessment Pro-social Behaviour
and rational choice there are emotional influences and Perceived Consumer Effectiveness
Collective Action Dilemma
societal and cultural issues that impinge on consumer Willingness to Pay
buying and individual’s behavioural choices. The review by Value Belief Norm Theory
Jackson concludes with a discussion of integrative theories,
Learning Cognitive consistency
which draw together internal and external factors. The Balance Theory
added value of integrated theories should be that alter- Consistency Theory
native causal factors can be assessed, such as the impact of Cognitive Dissonance Theory
emotions or the environment in the buying process, for Relational Discrepancy Theory
example, previously only considered as a cognitive process. Social learning Social Exchange Theory
Integrating theories may also further explain the impact of Behaviour Economic Theory
alternative influences on the rate at which individuals Behaviour Perspective Model
behave in respect of the buying process. Buying process Rational Choice
However, Jackson shows that integrative theories can Theory of Reasoned Action
become cumbersome. An example is Bagozzis’ Model of Theory of Planned Behaviour
Consumer Action, which is relatively inaccessible to a Hierarchy of Effects
Innovation Decision Theory
wider audience and cannot easily aid policy decisions
despite the breadth of issues that it covers. To understand Categorisation of consumers Behavioural Economic Theory
future energy use, with the intention of delivering achiev- Diffusion Theory
able acceptable emissions of carbon, it will be necessary to Product attributes and Attribute Theory (Diffusion
understand all the external and internal influences around categorisation Theory)
energy use; the technologies or processes, the adopters of
such processes and the environment in which they reside.
Hence, policy makers will be able to implement sound needs. Procedural rationality asserts that consumers have
policy and practitioners will be able to deliver lasting rules that allow them to make decisions. These rules are
solutions. based on non-compensatory procedures, which need not
take into account all elements, but just those important to
3. Towards a theory of efficient energy use by household the individual. If the criteria meet those of the individual,
consumers then their needs are satisfied and they proceed with the
purchase.
This section seeks to focus on the critical internal and Considering the reasons behind the consumption choice,
external factors that influence consumer choice in respect Behavioural Economic Theory (BET, as reviewed by
of energy use, using discussion from the wide range Diclemente and Hantula, 2003) posits that core reasons
of Consumer Behaviour Theories. Using this approach, it exist as to why ‘goods’ will be purchased by an individual;
is hoped to generate discussion in relation to a focussed for maintenance, to accumulate, for pleasure, and for
theory of efficient energy use that utilises existing accomplishment. In this respect, ‘maintenance’ goods
Consumer Behaviour Theory where appropriate. As an would be core goods to cover basic needs whereas
aid to this overview, Table 1 provides a graphical theory ‘accumulation’ goods would be standard items but of
map. better quality, ‘pleasure’ goods would be luxury items, and
the ‘accomplishment’ goods would be innovative items that
3.1. Consumer choice set the consumer out as a leader. This categorisation of
motivations corresponds closely with the concept of ‘needs’
Consumer theories have provided a range of insights into versus ‘wants. Individual needs will differ between needing
principles that direct or influence consumer choice. For ‘core’ goods, necessary for everyday living, and ‘peripheral’
example, Lavoie (2004) writes on post-Keynesian Con- goods, which are luxuries and based on ‘want’, compatible
sumer Theory and how it may have potential synergies with with the Hierarchy of Needs (Brugha, 1998). According to
consumer research and economic psychology. Consumers post-Keynesian Theory (as reviewed by Lavoie, 2004),
appear to utilise principles that occur in a priority order, on consumers needs are satiable, separable, sub-ordinate to
which they make proceduralised choices relative to their each other, and can ‘grow’; in other words, once a level of
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consumption has been reached, the individual as the
consumer is no longer satisfied and moves onto another
‘need’. This puts some categories subordinate to others,
based on the principle of irreducibility. In practical terms,
it follows that individuals will allocate how much of their
budget they are willing to spend within categories using
their own judgement. As choices are related to income,
consumers move through the hierarchy of needs and have
the capacity and resources to innovate and desire new
‘needs’.
3.2. Needs, values and attitudes influencing choice
‘Needs’ and ‘wants’ will to some extent be influenced by
an individual’s values and attitudes. Values are beliefs that
an individual holds and which will guide their behaviour;
for example self respect, or the maintenance of good
health. Personality theories posit that the ‘self’ contains
guides and standards that cause individuals to ‘self
regulate’. The guides to this self regulation are generally
accepted to be taught when the individual is still young,
and depending on the style of nurturing can either be a
promotional self regulation, whereby consequences are
based on nurture and aspiration, or a preventive self
regulation, whereby consequences are based on safety,
duty, and obligation. Either way, the consequences of this
self regulation, as predicted by ‘Control Theory’ and ‘Self-
discrepancy Theory’ are emotional, motivational, or
behavioural (Robins and Boldero, 2003).
It has been suggested that demographics may provide
subtle indicators of a person’s values. For example,
Salmela and Varho (2006) also support the findings of
other research where it was suggested that ‘green’
consumers were found within particular professions, such
as social and healthcare sectors. However, these concepts
show only indicators towards a person’s values and may
not provide the causal link to them.
Attitude is the way that an individual views, or behaves
towards an object, often in an evaluative way (Moore,
2001). ‘Social–psychological antecedents’, or more gener-
ally ‘attitudes’ have been identified as a key determinant of
environmentally conscious behaviour over demographics
(Stern, 2000); attitudes such as environmental concern,
political orientation, and in particular ‘perceived consumer
effectiveness’ (PCE) have been proven to be causal links to
behaviour (Roberts, 1996; Lee and Holden, 1999). There is
also support for Batsons’ Model of Pro-social Behaviour to
further understanding of these factors (Lee and Holden,
1999). Consumers can be influenced by their ethics and
beliefs, for example if they are motivated by ‘moral’ or
‘material’ ethics. Where consumers are motivated on
‘moral’ grounds, they move away from material consumer-
ism as moral issues conflict with material gain (Lavoie,
2004).
PCE is based on the concept that individuals who are
confident that their individual actions will lead to positive
consequences for the environment will be motivated to act
if they realise that they are part of a collective effort to
achieve a certain goal. (Peattie, 2001; Roberts, 1996). This
also requires the individual to trust that others will do their
part in achieving an overall goal, including politicians and
other stakeholders in the environment (Lee and Holden,
1999). The impact of ignoring this factor for marketing
would be that consumers avoid the social or societal
messages marketed with a product if they felt that their
actions were isolated and would have no effect; the concept
known as the ‘collective action dilemma’ (Prakash, 2002).
Past research on factors that influence ‘willingness to
pay’ has shown that attitudes are excellent predictors of
environmentally friendly behaviour (Laroche et al., 2001).
This may be enhanced if manufacturers provide evidence
that their products or services support environmental
claims, demonstrable through such schemes as accredita-
tion to standards (Vlosky et al., 1999) but there may still be
limiting factors, such as premiums set too high (Salmela
and Varho, 2006). A critical issue remains that consumers
do not always purchase products despite their stated
intentions to do so: for example, 20% of consumers state
a willingness to pay between 10% and 20% more for green
power products, yet actual adoption is less than 1%
(Truffer et al., 2001). Policy makers should therefore
consider the discrepancies that can exist between indivi-
duals stated and actual behaviour as referred to in the main
body of this paper. Therefore, when seeking to validate
policy, aspects that can lead to contradictions should be
mitigated. For example, if constituents state that they
would buy an affordable measure, the policy maker should
determine the definition of ‘affordable’.
Stern develops the role of the social environmental with
the Value–Belief–Norm (VBN) Theory. Stern et al. (1999)
used the basis of norm activation theories, i.e. personal and
moral norms, to develop a VBN Theory, which begins to
explain public support for environmentalism. Norm
activation follows when an individual has become aware
of potential consequences that may arise from an action.
Through the ascription of responsibility for those con-
sequences, individuals will alter their behaviour, thus
activating their personal norms. Adding to this, moral
norm activation theory posits that when an individual has
accepted the beliefs of a particular movement, generally on
altruistic principles, they accept responsibility that their
own actions may affect those beliefs and modify their
behaviour. As a development, VBN theorises that indivi-
duals accept the values of a movement, and that their
actions could improve the situation regarding those values
that may be under threat. Thus, their behaviour has been
‘normed’ through their beliefs based on the values of the
movement. As with all social theories, there is the risk of
free-riding, where individuals benefit from the actions of
others, however, this can be overcome when there is a belief
in the viability of group actions and individuals cannot
distinguish their efforts from those of others. Stern et al.
(1999) found that non-activist support for environmental
improvements was based on the three dimensions of
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A. Faiers et al. / Energy Policy 35 (2007) 4381–4390
environmental citizenship, consumer behaviour and policy
support, and in these three, personal pro-environmental
norms were the common factor. In testing this theory, the
causal links in VBN were the best theoretical account for
these three dimensions.
3.3. Learning, dissonance and cognitive complexity
influencing choice
Developing an understanding of an issue, product or
service is dependant on learning and behaviour will be
shaped by values and knowledge (Kaiser et al., 1999). Of
particular relevance to consumer behaviour is the concept
that individuals with either more knowledge or concern
about particular environmental issues state a willingness to
pay higher prices for alternative products (Rowlands et al.,
2002; Prakash, 2002). In a general behavioural context, as
opposed to consumption behaviour, Correia et al. (2005)
and Ellen (1994) both highlight examples of where the
existence of higher levels of knowledge was an important
predictor of pro-social and pro-environmental behaviour.
Individuals will need to analyse products and services in
order to learn about them. Analysis of a product will
require evaluation of both the content and the structure of
a product. Content in this context is defined as being a
mental evaluation born from knowledge of and beliefs
about that product, whereas ‘structure’ defines how the
individual cognitively places the product in relationship to
other products, goods or services. Therefore, an individual
will seemingly categorise a product thereby easing their
decision to accept or reject it. This process works by
limiting available input from the environment, by organis-
ing and moderating information, to a level that the
individual can still make an informed decision (Zinkhan
and Braunsberger, 2004). How elaborately an individual
may evaluate a product is a function of his or her ‘cognitive
complexity’; the greater the degree of complexity, the
higher the utilisation of product information and market-
ing messages on the decision to accept or reject a product.
Using a repertory grid to analyse cognitive complexity in
relation to consumer behaviour, Zinkhan and Braunsber-
ger (2004) found that although individuals may have a
complex understanding of one product, they may have a
more ‘simple’ understanding of another, hence cognitive
complexity is a ‘context specific’ phenomenon. In seeking
to understand the basis of complexity, the research found
support for the concept that where individuals had had
more experience, and had been exposed to more stimuli
regarding the products, they had developed superior
evaluative criteria and problem solving skills. This in turn
enabled them to make decisions independently of the
experience of others, to transfer their knowledge to others
and be more open to training in respect of the products. In
other words, a virtuous circle had developed in that the
more they knew, the more they wanted to know.
The result of learning is that individuals accumulate an
immense resource of knowledge over time, but they will
4385
only employ a fraction of their knowledge at any one time;
in other words, they appear to utilise a ‘working knowl-
edge’. Generally, an individual will seek to reduce
dissonance, so this working knowledge is more likely to
be consistent with their current values and attitudes. This
may provide an insight into why individuals change their
behaviour over time as they review their ‘working knowl-
edge’ and adopt revised values and attitudes. Self-reporting
mechanisms can be used to measure attitude to a given
product as behaviour includes verbal responses to pro-
ducts. However, it is not always possible to demonstrate a
consistent relationship between attitudes and behaviour, as
there are environmental factors that may influence
behaviour; for example social norms and expectations
(Robins and Boldero, 2003). Also of consequence are
‘habits’, where individuals may be aware of the need or a
desire to change their behaviour, but because of their past
behavioural patterns, or ‘habits’ they cannot make the
actual change required to update their behaviour; a
phenomenon identified by Salmela and Varho (2006).
Cognitive consistency theories such as Balance Theory,
Consistency Theory, and Cognitive Dissonance Theory
highlight individuals’ need for consistency. Where indivi-
duals experience inconsistency, this creates a state of
dissonance, which in turn drives a desire to return to
consistency. Hence, dissonance can also be a mechanism
that underlies resistance to change. Dissonance occurs at
the individual level, and directly affects the decision to
adopt ‘goods’, emphasising the need to investigate beha-
viours at the micro level (Jermias, 2001). Another example
of a Cognitive Consistency Theory, Relational Discrepancy
Theory, suggests that discrepancies represent different
qualitative psychological situations and lead to differing
outcomes, thus the consequential feelings that individuals
experience may result in behaviour other than that
originally intended by that individual. For example,
discrepancies that occur when the individual is acting
against their ‘ideal’ standard will cause a ‘dejection’-related
outcome, and discrepancies that occur against a more
definite standard, by which the individual believes they
‘ought’ to behave, will create an ‘agitation’-based outcome
(Robins and Boldero, 2003). To avoid dissonance occur-
ring in the first place, individuals usually favour informa-
tion that confirms their beliefs and so will seek that
information out. Alternatively, they may ignore or
hypercritically scrutinise feedback that disagrees with their
point of view. Hence, individuals have a ‘confirmatory’
bias, which will impact on marketing activities that seek to
persuade or influence behaviour, as people who agree with
the values of the concept will be more open to an awareness
campaign.
Individuals have been shown to adopt various strategies
for reducing dissonance when it occurs and the extent to
which these are followed is dependant on the ‘choice’ and
‘commitment’ of the individual. For example, individuals
may follow a course of action but experience dissonance.
Hence, they attempt to persuade themselves that having
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followed that course of action, the rejected alternative was
less attractive, and that the chosen alternative was not as
unattractive as they originally perceived. Similarly, the
individual may exaggerate the attractiveness of the chosen
alternative and the unattractiveness of the rejected alter-
native (Jermias, 2001).
3.4. Social learning
As an alternative approach to reducing dissonance,
individuals may seek advice from a social network in order
to improve their own judgment or to increase their
justification for a decision, in other words, learn from the
social network. Hence, they will utilise that advice to fill
gaps in their own knowledge or assess the value of
alternative options for a decision. When presented with
advice, the recipient could choose to ignore it, accept it in
part with modification, or accept it unconditionally. This
raises the question as to whether there are two cycles of the
innovation decision process, where first, information has to
be adopted, and second, the product itself. Yaniv (2004)
identified factors that will affect whether or not attitudes
can be changed through advice. The key influences are
knowledge of the field in which the decision is made, and
also the relative ‘distance’ between the opinions of the
individual seeking advice and the advisor. Hence, those
with less knowledge are more likely to take advice, and
where advice is consistent with the individuals’ own
opinion, it is regarded. However, there are no guarantees
that the advice will be right, or are there clear justifications
for ever accepting knowledge from others.
Individuals can therefore engineer their social network to
fit with their own values and attitudes. Reducing dis-
sonance in relationships may suggest that individuals will
gravitate towards others that have a closer opinion to their
own. Heider’s Balance Theory, dated 1946, suggests that
individuals will develop positive attitudes towards those
with whom they have had previous association, which is
important in that it introduces the element of ‘trust’ in a
relationship. Social Exchange Theory suggests that indivi-
duals choose whom they have a relationship with based on
demographic characteristics, personality attributes and
their attitudes. These relationships have a strong degree
of commensurability, in that individuals are more likely to
engage with one another if their attributes are common,
even if they are diametrically opposed (Corbitt et al., 2003).
For example, if both people believe in the existence of
‘climate change’, they are more likely to engage with each
other, even if they are at polar ends of the debate regarding
its potential consequences, than if one of the parties had
no view on or belief in its existence as an issue. Hence, if
one does not share some qualities, aspirations or obliga-
tions with another, they will not connect (Robins and
Boldero, 2003).
Behavioural Economics Theories identify the existence
of ‘classical conditioning’, where consumers have been
conditioned through media to act in a certain way, or
associate certain aspects or emotions with a product.
Conditioning is carried out over time through media
advertising, where desirable features are always linked to
a certain product or service, for example, happiness and
laughter being linked to certain food products suggesting
that the consumer will experience similar emotions or
outcomes if they consume the product. According to the
Behaviour Perspective Model, consumer choice will be
influenced by various stimuli, such as hedonic reinforce-
ment as with the example above, informational reinforce-
ment, where ‘information’ will suffice to persuade a
consumer to act in a certain way, and through ‘aversive’
stimuli, which persuade a consumer to act to avoid a
negative outcome (Diclemente and Hantula, 2003).
Wider cultural and societal influences will also influence
behaviour (Dunphy and Herbig, 1995). A collective society
will look more readily for solutions to global issues
compared with an individualistic society. (Pedersen, 2000;
Parthasarathy et al., 1995) Collective societies have greater
social interaction and disseminate messages faster. However,
individualistic societies, such as in the UK, tend towards
more materialistic values (Lynn and Gelb, 1996), which is
relevant to this study when considering the inclination of an
individual to buy a personal, domestic power generation
system. In respect of the product, Peattie (1992) and Rogers
(1995) are consistent in their findings that while products
must be compatible with the cultural environment in which
the adopter resides; factors such as the economic climate,
security of employment, political stability and climate,
religious beliefs, weather and season should also be
considered. In an earlier work, Lai (1991) argues that these
should be considered as situational factors in the adoption
process. Cultural compatibility has been proven to affect
product and service choice in the buying and adoption
process (Pedersen, 2000) for example; Heimburger et al.
(2002) recognised that a key cause of failure to adopt
emergency contraception was the role of cultural influences
such as family norms and religious beliefs.
3.5. The buying process
The buying process (Peattie, 1992), has been widely
documented and follows the process of rational choice,
whereby the evaluation of alternatives is based on an
evaluation of costs against benefits. This is a cognitive
process influenced by varying perspectives, such as available
information, quality or value. Rational Choice is compatible
with the innovation decision process (Rogers, 1995) which
suggests that individuals recognise a need for a product,
generate an awareness of the product based on its attributes
and then decide to either consume or reject the product. If
the product is consumed, its use may be later discontinued,
and similarly, if it is rejected, can be later adopted. However,
rational choice does not incorporate the fact that individuals
also utilise their emotional perspective and may choose to
either ally or distance themselves to goods or services they
like or dislike (Hansen, 2005).
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A. Faiers et al. / Energy Policy 35 (2007) 4381–4390
The Theory of Reasoned Action (TRA), and Planned
Behaviour (TPB) are established theories reviewed by
many researchers (for example Jackson, 2004; Kalafatis
et al., 1999; Kaiser et al., 1999). TRA and TPB attempt to
place the buying decision process within a context of
rational decision-making based on perceptions, values and
attitudes by explaining the control that the individual has
over the buying decision. The theory suggests that the level
of ‘intention’ shown by an individual is the best predictor
of behaviour. ‘Intention’ is influenced by internal and
external control constructs, and is seen as a function of the
individual’s attitude toward behaviour and any subjective
norms. Hence, ‘intention’ is a cognitive representation of
an individual’s behavioural tendency. Kidwell and Jewell
(2003) developed this understanding of intention by
establishing that an antecedent relationship exists between
internal and external control influences, with external
control as an antecedent and internal control as the more
proximate determinant of behavioural intent. Consistent
with the criticisms of rational choice however, more recent
studies have agreed that TRA does not account for
affective or emotional behaviour. Fitzmaurice (2005)
argues that the buying decision involves hedonic and self-
expressive involvement. The findings of an experiment to
judge the mediating effect of self-congruity found that
‘eagerness’ was a mediating factor on intention. In other
words, the more ‘eager’ a person was to carry out a
behaviour, the greater the intention to perform that
behaviour. This raises the theoretical question as to the
order in which consumers follow the buying process; does
affective reasoning precede cognition? Fitzmaurice (2005)
argues through empirical results that attitudes do not
impact on ‘eagerness’, thereby implying that affective
reasoning is a separate component of the process.
The Hierarchy of Effects model focuses on the motiva-
tion for buying using the rational choice model but begins
to incorporate affective or emotional influences. An
individual progresses along a ‘think-feel-do’ path, where
they think about the purchase, develop a feeling about
purchasing it, based on their liking, preferences and how
convinced they have become, and finally either purchase or
do not. The attitude formation process (Schiffman and
Kanuk, 1997) correlates with the hierarchy of effects by
suggesting that attitudes are formed on the basis of how the
individual has gained knowledge on the product (thought),
then evaluated the product utilising both cognitive and
affective (feeling) reasoning and finally formed an attitude
(do). Whilst many authors have considered the merits of
the ‘feel-think-do’ model and assume that behaviour is
always dependant on awareness (Meyer, 2001), it might
not always apply to actual buying behaviour. Parthasar-
athy et al. (1995) argues that later adopters, the ‘laggards’
in particular, are more motivated by the social influences
around them, encouraging them to ‘do’ first, then ‘think’
and finally ‘feel’. In effect, this means that the final set of
adopters will be less influenced by their own judgement,
than by that of their peer groups or the society they live in.
4387
The Hierarchy of Effects model differs from the
innovation-decision process in that the ‘knowledge’ and
‘awareness’ stages are reversed, due to the different focus
that the processes have. In the innovation-decision model,
‘knowledge’ refers to the adopter and how they become
knowledgeable about their needs or wants, and ‘awareness’
refers to the heightened awareness of an innovation as they
learn about it. In the hierarchy of effects, the focus on the
adopter comes at the decision stage, as the awareness stage
refers to when the potential buyer first becomes aware of
the products, and then develops knowledge about it
subsequently.
The ‘innovation decision’ process has been used speci-
fically to design or test projects that are being implemented.
Hubbard and Mulvey (2003) and Heimburger et al. (2002)
used the process to evaluate the implementation of a
diffusion project, and found that the adoption rate was
positively related to the level of knowledge potential
adopters demonstrated, and despite some adopters reject-
ing the innovation due to its attributes, they remained open
minded to later adoption. Morris et al. (2000) mapped the
decision process that farmers took to adopt a government
funded grant scheme. From their findings, the authors were
able to identify where weaknesses lay with the marketing
approach the government agency took; focusing primarily
on the knowledge and persuasion stages but not facilitating
the later stages of ‘decision, implementation and confirma-
tion’. Other research has found that the awareness stage in
the process is the optimal point at which to gain a full
understanding of all the product attributes and thus
overcome any post-purchase dissonance (Rogers, 1995).
Kaplan (1999) takes this further by stating that the early
need for ‘knowledge’ is critical, as it a pre-cursor to
adoption interest.
3.6. Categorisation of consumers
BET suggests four categories of consumer based on
environmental and cognitive parameters. Consumers can
be influenced in their moods or desires through commu-
nication techniques and will respond, in part, according to
their level of ‘education’ in respect of the product in
question. The four categories are ‘initiators’, ‘early’ and
‘later’ imitators, and finally, ‘last’ adopters, as outlined in
Table 2 below. Within the categories, the consumers would
demonstrate their type of behaviour along a high-low
Table 2
An overview of the behavioural perspective model (after Diclemente and
Hantula, 2003)
Antecedent influences Dominant type of Category of adopter
behaviour
Moods Accomplishment Initiator
Ability to pay Pleasure Early imitator
Deprivation Accumulation Later imitator
Learning Maintenance Last adopter
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4388 A. Faiers et al. / Energy Policy 35 (2007) 4381–4390
continuum according to the level of antecedent influences,
such as their ‘moods’, their ‘ability to pay’, levels of
‘deprivation’, and the level of their ‘learning’ in respect of
the product or service.
BET suggests a categorisation which is in some way
compatible with the categorisation of individuals that
follow the innovation-decision process as generalised by
Diffusion Theory (Rogers, 1995). This theory categorises
adopters into five types, based on the time at which they
adopt an innovation relative to its launch. From empirical
evidence, the theory has identified relevant factors such as
personality, values and attitudes, which affect this time
difference in adoption. Adopter categories change from
highly innovative to least innovative as the diffusion
sequence unfolds. Adopters are categorised into (a)
innovators (2.5% of adopters), (b) early adopters (12.5%
of adopters), (c) early majority (35% of adopters), (d) late
majority (35% of adopters) and (e) laggards (15% of
adopters). The theory suggests that the distribution of these
categories is normally distributed with the first 50% of
consumers being in the first three adopter categories.
BET allows categorisation based on dominant motiva-
tions for purchase. As seen in Table 2 below, an ‘initiator’
will have the resources and mindset to purchase products for
accomplishment, whereas someone buying for ‘maintenance’
issues may be less innovative because they have priorities
that are not driven by need for accomplishment or pleasure.
3.7. Product attributes and categorisation
Expanding on the categorisation of products and goods
in BET, Diffusion Theory models consumer expectations
of products and services against product attributes,
suggesting that these expectations influence the willingness
to buy. Instead of goods categorised against the motivation
for purchase as above, products are categorised against five
predominant attributes; relative advantage, compatibility,
observability, trialability, and complexity (Rogers, 1995).
The ‘relative advantage’ describes the marginal advan-
tage an innovation has over existing products. The critical
aspect of relative advantage is how potential adopters
perceive its advantage, rather than how it actually performs
(Smizgin and Bourne, 1999; Aggarwal et al., 1998), for
example, the enhanced status that ownership of a product
brings (Martinez et al., 1998; Rogers, 1995). Bhate and
Lawler (1997) suggest that it is factors of convenience and
price that are most significant. Firms can improve the
perceived relative advantage by decreasing any disadvan-
tage and have been shown to increase the rate of adoption
by offering incentives (Velayudhan, 2003; Prakash, 2002).
Incentives can take many forms, either monetary or non-
monetary, but are not without risk to the firm (Prakash,
2002). For example, as Velayudhan (2003) discovered
through research, featuring grants as part of the promo-
tional package focuses attention on the high cost of the
innovation and away from some other advantageous
features that might have persuaded a potential consumer.
In addition, consumption on the basis of an incentive can
lead to discontinued use of the product if the individual
becomes disillusioned with it, and withdrawal of the
incentive may lead to reduced levels of consumption
(Cabraal et al., 1998; Rogers, 1995). ‘Compatibility’
describes how the product fits with the individual’s values,
attitudes and behaviour. Attributes also include how visible
the innovation is (‘observability’), or how accessible it is for
individuals to use on a trial basis (‘trialability’). ‘Complex-
ity’ is considered to be a restrictive factor in adoption, and
describes how difficult it is to understand either the
innovation, or its principles (Vollink et al., 2002; Kai-ming
Au and Enderwick, 1999; Rogers, 1995).
It has been demonstrated that consumers assess attri-
butes in a stepwise process, commencing with relative
advantage, then compatibility and complexity. These three
attributes have been shown to hold the most influence over
the purchase choice (Rogers 2001; Dunphy and Herbig,
1995; Mohr, 2001; Martinez et al., 1998). Rejection of the
innovation can occur at any time in the process and
attributes cannot compensate for each other. A product
that demonstrates good relative advantage does not
necessarily enhance the trust that adopters have in it,
although it may influence their perceptions of quality and
how they would use it (Vollink et al., 2002). In the case of
how customers have assessed ‘green’ electricity, it would
seem that consumers do not always trust ‘green power’
products to be necessarily ‘green’, in part because they are
not knowledgeable about the power networks and infra-
structure (Salmela and Varho, 2006).
Pujari et al. (2003) propose that only two levels of
attributes exist, namely ‘core’ attributes and ‘auxiliary’
attributes. Whereas ‘core’ attributes provide the basic level
of benefits that consumers require, ‘auxiliary’ attributes
help to define that product against another. The impact of
this categorisation suggests that the success of a ‘green’
product will depend on whether the product has environ-
mental considerations fully incorporated within it as core
attributes, rather than as an auxiliary benefit added later.
As seen in BET, where an individual has fewer disposable
resources available they will be influenced by the degree of
uncertainty or risk arising from a product or service. Hence,
risk appears to be a restrictive attribute that it will lessen the
likelihood of purchase (Aggarwal et al., 1998; Smizgin and
Bourne, 1999; d. Ruyter et al., 2001). Consumers will
perceive risk based on either issues of performance or time,
or on perceptions and attitudes formed from personal or
vicarious experience. Levels of risk may alter depending on
the resources available to the individual; for example an
adopter with adequate financial resources will view any
capital risk more favourably than an adopter with poor
financial resources (Martinez et al., 1998).
3.8. Towards a model for understanding behaviour
In conclusion, the buying decision, or the decision to
behave in a certain way towards energy use is informed by
 ARTICLE IN PRESS
A. Faiers et al. / Energy Policy 35 (2007) 4381–4390
a wide range of internal and external factors. This paper
has sought to draw together the key issues from Consumer
Behaviour Theories with a view to a model of behaviour
being developed in further research that can be used to
inform the policy decision process.
The scope of this paper has not included a discussion in
relation to the ‘rebound’ effect, where technological
efficiencies are cancelled out by higher levels of use due
to savings made. However, this is a critical consequence on
the use of energy following adoption of energy measures
and should be considered in full.
In advance of a model being developed that can identify
causal relationships between the three central factors of the
adoption decision, i.e. the product, the individual and the
environment in which they are placed, policy makers
should be more aware that carbon reduction targets will
rely on individuals using energy efficiently and those
individuals operate in a social context and the influence
of cultural, social and emotional influences cannot be
underestimated. To that end, it would appear that the issue
of learning and awareness, coupled with accessibility to
simple technologies would be a central factor to formulat-
ing effective policy.
Thanks are extended to the valuable comments made by
the anonymous reviewers during the publication of this
material.
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