1 Consumer adoption of energy efficient technologies: Evidence from a UK district heating scheme Andrew Burlinson * , Giuliana Battisti § and Monica Giulietti †! This paper is draft form and is circulating for discussion and comments only. Do not quote and/or cite without permission of the authors. Copyright held by the authors. Abstract This paper investigates the decision-making process leading residential consumers to adopt energy efficient technologies on the basis of financial and other considerations; contributing to the debate about the so-called efficiency paradox. We explore the validity of various theories of consumer behaviour using information on the decision to connect to the district- heating system, a greener alternative to the prevailing individual heating systems, using a quasi-experimental survey of 784 households conducted in 2014. The results suggest an internal discount rate of at least 30 per cent for homeowners, a signal that consumers undervalue future energy costs. In addition, we find the household’s decision to be significantly and negatively affected by inattention and years of payback up to around 7 years. Our findings further suggest that neglecting inattention can lead to severe biases which cast doubt on the existence of the energy efficiency paradox. We believe these results help explain why consumers in the UK, particularly those on a low-income, are unlikely to invest in energy efficient technology. Keywords: consumers, technology adoption, energy efficiency, district heating JEL codes: D12, C35, O35, D91 Acknowledgements: Andrew Burlinson and Monica Giulietti acknowledge financial support from Western Power Distribution as part of the FlexDGrid project. *Warwick Business School, University of Warwick, Coventry, UK, email: A.C.Burlinson@warwick.ac.uk § Warwick Business School, University of Warwick, Coventry, UK, email: G.Battisti@wbs.ac.uk † School of Business and Economics, University of Loughborough, Loughborough, UK, email: M.Giulietti@lboro.ac.uk ! Monica Giulietti is a member of the panel of technical experts for the delivery of the Electricity Market Reform. She has contributed to this work in her academic capacity only. The views expressed in this paper do not represent those of the other members of the panel nor of the Department of Energy and Climate Change'.