Energy efficiency and the role of energy-related financial literacy: evidence from the European residential sector

Abstract In this paper, we analyze the level of efficiency in use electricity European residential sector relying on a cross-sectional data set comprised 1375 households located Italy, Netherlands, and Switzerland observed 2016. To do this, estimate an demand frontier function using stochastic approach. The empirical results show that these three countries could save approximately 20% its total consumption average if it improves electricity. These figures are line with recent studies for US sector. Moreover, link energy to energy-related financial literacy. We find while energy-relevant knowledge per se does not play significant role, stronger cognitive abilities associated higher levels efficiency.