Lifestyles and Their Impact on Energy-Related Investment Decisions

doi:10.4236/lce.2011.22014

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Low Carbon Economy, 2011, 2, 107-114

doi:10.4236/lce.2011.22014 Published Online June 2011 (http://www.SciRP.org/journal/lce)

Lifestyles and Their Impact on Energy-Related

Investment Decisions

Maria Gröger, Victoria Schmid, Thomas Bruckner

Institute for Infrastructure and Resources Management, University of Leipzig, Leipzig, Germany.

Email: [email protected]

Received May 3rd, 2011; revised May 23rd, 2011; accepted June 2nd, 2011.

ABSTRACT

This paper presents an empirical survey of energy-related i nvestment decisions made by private households in Germany.

The investment behaviour is segmented and discussed by applying the milieu approach. The decision makers are clus-

tered in certain lifestyles, as represented by the Sinus-Milieus® from the Sinus Institute. To analyse the relationship

between the lifestyles of house owners and their energy-related investment decisions, telephone interviews were con-

ducted in order to acquire data on currently installed heating systems and preferences for future heating systems in

private residential buildings. The results of the survey support the hypothesis of a link between lifestyles and the en-

ergy-related investment behaviour. Based on the observed relationship between lifestyles and decisions on energy

technologies, predictions of energy trends in private residential buildings can be improved. In addition, the knowledge

about specific development paths allows the utilisation of the information for information campaigns and the promotion

of energy supply technologies which lead to lower CO2-emissions.

Keywords: Lifestyles, Consumers, Survey , Space Heating Technology

1. Introduction – Rationale for the Approach

Private consumption, especially energy consumption, is

one of the largest demand classes in most economies, and

is therefore responsible for a major fraction of global

emissions. Reducing energy use and related emissions in

private households is an important step towards a more

sustainable future in a carbon neutral economic society.

In industrialised countries, the energy consumption in

private households is dominated by the heating energy

demand; indeed, with 67% space-heating is still the larg-

est household energy end-use in the EU [1]. Many stud-

ies [2-5] show that the use of fossil fuels for heating

could be reduced significantly by more efficient heating

systems, the use of renewable energies and an energy

efficient retrofitting of buildings. However, the extent to

which the theoretical reduction potential can be realized

depends on individual decision processes. For instance,

residential heat demand depends on the energy consump-

tion behaviour of building owners. Such behaviour can

be subdivided into two consumption profiles:

Operational decisions of private households, e.g. using

hot water and selecting an indoor temperature, are made

intuitively and may not be changed expeditiously [6].

However, in order to be able to make energy-related in-

vestment decisions, different technology options, the fu-

ture energy demand and the estimated costs have to be

considered. The study presented in this paper focuses on

such investment decisions related to energy conversion

technologies, which largely influence the final energy

demand of buildings (cf. Figure 1). In doing so, this

study concentrates on investment decisions in the resi-

dential sector which are undertaken by private building

owners.

Diffusion of distributed energy technologies affects

the entire urban energy system. Thus, environmental in-

novations (e.g. the use of renewable energy) in this field

are an important step towards a sustainable future. Using

lifestyles is a possible approach for conducting research

on environmental innovations in the context of energy

consumption [7,8 ]. That data is complemented with find-

ings from sociology, which indicate that a society can be

clustered into social milieus [9]. This empirical socio-

logical research has revealed that most people in a soci-

ety are not homogeneous. They differ with respect to

their preferences and knowledge, their ability to explore

and process information, and therefore exhibit individual

rates of acceptance of energy technologies. Consequently,

Rogers [10] and Vishwanath [11] differentiate people

according to their innovativeness because of the impact

Lifestyles and Their Impact on Energy-Related Investment Decisions

108

Figure 1. Different influences affecting heat energy con-

sumption.

of personality on the adoption or rejection of innovation.

Lifestyle-related, target-group segmentation is used in

social scientific environmental research to assess the re-

lationship between attitudes and environment-related

behaviour. The influence of lifestyles on a sustainable

environmental development in general [12-14] and en-

ergy consumption in particular [15,16] has been dis-

cussed frequently, but not yet conclusively. Today, there

is a broad consensus that energy consumption by a soci-

ety is not only influenced by technical aspects (e.g. effi-

ciency) but also by socio-demographic aspects (e.g. age,

education, size of households) and the lifestyles of con-

sumers.

The application of the lifestyle approach to environ-

mental research is motivated by the assumption that en-

vironmentally compatible behaviour can only be pro-

moted by considering behaviour patterns of different

lifestyle groups [17,18]. This assumption has been ado-

pted by studies that investigate the segmentation of con-

sumers with regard to their energy using behaviour [19]

and by studies on the acceptance of nature conservation

measures [20].

Studies that have been conducted thus far indicate that

not only energy consumption, but also energy-related in-

vestment decisions can be assessed with the aid of the

milieu approach. According to ecological consumer re-

search [21,22], the individual energy-related investment

behaviour is a strategic decision.

Lifestyle research has been primarily influenced by the

milieu approach developed in the field of market re-

search. Well-known models used both in science and

marketing are the lifestyle approaches developed by

Schulze [23] and the Sinus Institute. The Sinus-Milieus®

have been established as a science-based model. They are

continuously kept up-to-date by utilising the results of

secondary research and information obtained by the mo-

nitoring socio-cultural trends. Today they are broadly

used for mark e t r e s e ar ch and scientific research related to

sustainability and environmental research [24]. For ex-

ample, the future behaviour of private households with

regard to their water consumption was analysed using the

Sinus-Milieus® [25].

The results obtained confirm that energy-related in-

vestments by private households can be clustered and

evaluated by using the lifestyle concept. The motivation

for the present study was the hypothesis that an analysis

of private decisions could deliver more profound knowl-

edge about expected rates of future house renovations

and preferred heating technologies. Understanding con-

sumer behaviour is a prerequisite for actor-oriented and

target-group specific approaches that attempt to promote

a reduction in th e residential heat demand. Thus, the fol-

lowing empirical approach, which was designed to inves-

tigate energy-related investment decisions made by pri-

vate households, attempts to analyse to what extent a

relationship between the lifestyle of house owners and

their investment decisions concerning energy technolo-

gies exist. To this end, telephone interviews were con-

ducted as part of this study in order to acquire data on

currently installed heating systems and preferences for

future heating systems in private residential buildings.

In part 2 of this paper the applied target-group model

and the methodology of the empirical analysis are de-

scribed. In part 3 the main findings of the survey are

presented and discussed. Finally, the most important les-

sons learnt are summarised and their importance for fur-

ther research is discussed.

2. Empirical Survey

2.1. Lifestyle Approach

A possible segmentation of lifestyle clusters is provided

by the Sinus-Milieus®. The underlying scientific model

groups people according to their attitudes towards life

and their ways of life. Fundamental value orientations as

well as attitudes towards family, partnership, work, lei-

sure activities, culture, money and consumption are re-

garded as being influential on lifestyle typology. The

evaluation applied provides interesting results for con-

sumer and market research. In addition, it not only allows

an analysis of the survey results that reflects socio-de-

mographic criteria but also one of socio-cultural charac-

teristics.

The Sinus Institute has applied this milieu concept in

18 countries so far. Therefore, Sinus-Milieus® are de-

veloped and validated individually for each country.

Figure 2 shows the classification of the ten Sinus-Mi-

lieus® according to the social classes and value orienta-

tion of the German population. Figure 2 points also out

overlaps of some milieus as it is not possible to draw

Lifestyles and Their Impact on Energy-Related Investment Decisions109

Figure 2. The Sinus-Milieus® in Germany used in the em-

pirical study. Source: Sinus Sociovision.

exact boundaries between the lifestyle types. Thus, for

strategic investigations the individual milieus are often

compressed into four segments (Table 1).

In order to investigate the social diffusion processes of

technological innovations, two important milieu groups

should be disti ngui shed:

Modern Performers are important representatives of

the Social Leaders class. They rep resent a young , uncon-

ventional and likewise very educated milieu. They have

high incomes and show a willingness to spend higher

prices for quality and environmental friendly products.

However, they exhibit an extremely resource-intensive

lifestyle, which is characterized by a relatively high land

and energy consumption. Modern Performers belong to a

milieu that is willing to adapt to innovations quickly. As

a consequence, they make significant contributions to the

standards of a society. The other milieus orient them-

selves according to set trends and standards and adapt

their behaviour to them. With their climate-friendly atti-

tude towards renewable energies, Modern Performers

have a role model function and play an important role in

the environmental and sustainable communication [26].

The Middle Class b elongs to the Mainstream and cha-

racterises the society’s average age, education, and in-

come. However, their resource use and their willingness

to pay higher prices for environmental friendly products

are slightly above the average of the population as a

whole. The Middle Class is one of the milieus which is

resistant to innovations. The focus of this milieu group is

on stability. Decisive for the adaption or refusal of inno-

vations is the degr ee of uncertainty related to the innova-

tion [26].

Using basic values and attitudes from a questionnaire

comprising 45 questions, the marketing company Sinus

Sociovision divides the German population into ten Si-

nus-Milieus®. For the study described in this paper, the

Sinus Institute provided the respective questions to be

included into the questionnaire on lifestyle-related in-

Table 1. Classification of the Sinus-Milieus®.

Segment Sinus-Milieu®

Modern Performers

Well-Establisheds

Social Leaders

Post-Materialists

Middle Class

Mainstream Consumer Materialists

Upper Conservatives

Traditionals

Traditionalists

Nostalgics of former GDR

Experimentalists

Hedonists Escapists

vestments. The answers of the respondents related to the

Sinus-Milieus® were sent back to Sinus and coded into

lifestyles by them. Therefore, the authors had no access

to the cluster analysis used for generating the segmenta-

tion and are not allowed to publish the lifestyle-related

questions.

The use of the Sinus-Milieus® for scientific analyses

has been criticized because of this lack of information

disclosure. However, the above-mentioned studies [24,25]

show that it is common to use the Sinus-Milieus® in the

field of diffusion and sustainability research despite this

disadvantage. In comparison to other classifications of

milieus, the Sinus-Milieus® have the advantage that the

company Microm is able to provide compatible, spatially

referenced lifestyle data for Germany, Austria and Swit-

zerland [27]. The lifestyle data is therefore available in a

way appropriate for analysing the technical data for

buildings (age, type etc.) – an aspect which is important

for target-group-specific su stainability approaches.

2.2. Method

The empirical research consisted of a standardized ques-

tionnaire, conducted in Germany. The survey primarily

addressed the attitude of the individual lifestyle groups

towards different heating technologies.

The choice of people to be interviewed was based on a

multi-stage random sample. The target group was prop-

erty owners of one-family houses, double-family houses

and row houses. For this purpose we relied on the will-

ingness of the persons to take part in the interviews. The

survey was conducted using a computer-assisted tele-

phone interview, which took approx. 15 min. per inter-

view. In total 471 building owners were asked to reveal

their energy-related investment decisions. A total of 429

inquiries were completely filled out and evaluable. The

evaluation covered a basic computation and a bivariate

analysis based on the lifestyle aspect.

Lifestyles and Their Impact on Energy-Related Investment Decisions

110

3. Empirical Findings

3.1. Descriptive Statistics

Table 2 shows a summary of the main demographic

characteristics of the sample. From the data appears that

it is not a representativ e sample for Germany. The age of

the test persons is between 17 and 92 years. The mean

age Md = 57 is above the federal average, likewise the

educational level. 187 (68%)1 participants mention a

household income of 2,000 Euro and more. 214 (50%)2

of the participants are gainfully employed, whereas the

share of all employed people in Germany was 40%3 in

spring 2010.

The frequencies of the Sinus-Milieus® in the sample

are presented in Figure 3, as well as a comparison of the

average in Germany. The most represented are the Post-

Materialists with 154 test persons (35.4%). Together

with the Modern Performers (33 people, 7.7%) and the

Well-Establisheds (92 people, 21.4%) they form the So-

cial Leaders. The Traditionalists are represented by the

Upper Conservatives (31 people, 7.2%), the Traditionals

(21 people, 4.9%) and the Nostalgics of former GDR (15

people, 3.5%). The Consumer Materialists (10 people

2.3%) and the Middle Class (44 people 10.3%) represent

the Mainstream. The Experimentalists (30 people, 7.0%)

and the Escapists (0.2%) belong to the Hedonists. With

just one test person the Escapists are strongly underrepre-

sented.

The clear over-representation of Post-Materialists and

Well-Establisheds can be traced back to the fact that both

milieu groups live in houses above average [26] and so

were qualified above average as target subject for the

survey. Another reason could be the relatively high en-

vironmental orientation of these milieus, which would

explain a higher willingness to participate in the tele-

phone interview.

As in the present sample an equ al size of the groups in

regard to the lifestyles is not given (see Figure 3), the

analysis of variance was not possible due to a missing

homoscedasticity. Nevertheless, within the sample dif-

ferent attitudes of the lifestyles in relation to energ y tech-

nologies can be recognized.

The empirical data reveal a relationship between life-

style typology and the prospective choice of heating sys-

tems based on fossil fuels or renewable energy. Figure 4

shows a different pronounced preference for renewable

energies of the individual milieus. A bit surprising is th at

Traditionals and Nostalgics of former GDR – both mi-

lieus are classified as conservative and resistant to inno-

vations – have installed more renewable energy systems

than more innovative lifestyles like the Well-Establish-

eds. In Figure 4 it is distinguished between fossil fuels

and renewable fuels, meaning a more pronounced pref-

erence of the Well-Establisheds for environmentally

friendly gas-fired boilers based condensing boiler tech-

nology disregard here. In the group of renewable ener-

gies wood pe llets can be found – a prefer ence of the Tra-

ditionalists towards the classical fuel wood influences the

results, too.

Table 2. Descriptive statistics (N = 429).

Demographic

characteristics Value Frequency

female 213 (49.7%)

Sex male 216 (50.3%)

< 500 7 (1.6%)

500 - < 900 5 (1.2%)

900 - < 1,500 31 (7.2%)

1,500 - < 2,000 44 (10.3%)

2,000 - < 2,500 44 (10.3%)

2,500 - < 3,000 30 (7.0%)

3,000 - < 3,500 28 (6.5%)

= > 3,500 85 (19.8%)

Household income

(€)

not specified 155 (36.1%)

no graduation 1 (0.2%)

School leaving certificate 198 (46.2%)

A-level (German Abitur) 56 (13.1%)

University degree 173 (40.3%)

Education

not specified 1 (0.2%)

yes 214 (49.9%)

no 212 (49.4%)

Employed

not specified 3 (0.7%)

1Based on 274 specific data.

2Based on 426 specific data.

3In accordance with the Federal Statistical Office of Germany. Figure 3. Frequencies of Sinus-Milieus® in comparison to the

average in Germany.

Lifestyles and Their Impact on Energy-Related Investment Decisions

111

In addition, two extremes can be identified with re-

spect to the preference of using fossil fuels: The Sinus-

Milieu® Middle Class shows a clear preference for fossil

fuels (80%). In contrast, only 40% of the Modern Per-

formers prefer fossil fuels. Both Sinus-Milieus® (Middle

Class and Modern Performers) also represent important

groups regarding the social diffusion of technological

innovations. Furthermore, similar socio-demographic fac-

tors (e.g. age) of both milieus facilitate a comparison.

Therefore, the following presentation of the survey re-

sults will focus on the attitud e of Modern Performers and

Middle Class.

3.2. Heating Systems in Use

Classifying the currently used heating systems by type

(Figure 5) provided the following results: Significant

Figure 4. Relationship between specific Sinus-Milieus® and preference for fossil-fuelled heating systems. (Because of an in-

sufficient number of cases the Sinus-Milieu® Escapists are not shown.) Source: Institute for Infrastructure and Resources

Management, 2010.

Figure 5. Heating systems used in Germany, classified by Sinus-Milieus®. Multiple answers were allowed. Source: Institute

for Infrastructure and Resources Management, 2010.

Lifestyles and Their Impact on Energy-Related Investment Decisions

112

differences between the lifestyles can be noted with re-

spect to the application of renewable energy technologies.

The Modern Performers occupy a leading position: 21%

of them already use solar heating systems, 12% geother-

mal energy and 9% heat pumps. Only 11 % of the Middle

Class use solar heat, whereas geothermal energy and heat

pumps are not used at all thus far. An exception is the

modern form of the renewable energy source wood.

Wood pellets are used more than twice as much by the

Middle Class (7%) as by Modern Performers (3%).

In both milieus natural gas fuelled heating systems

represent the commonly used systems. Gas boilers are

increasingly used in combination with innovative tech-

nologies and not just as a single heat source.

The differences between the two milieus are minor in

the case of gas, whereas the Modern Performers (24%)

use oil much less frequently than the Middle Class

(43%).

In the survey, no one has yet chosen small combined

heat and power plants (CHPs). The survey reflects the

fact that night storage heaters and coal heating are de-

clining technologies in Germany. Only the Middle Class

still uses coal-burning stoves (7%) and night storage

heaters (2%). District heating plays only a minor role

(Modern Performers 3%, Middle Class 2%). This is pri-

marily due to the fact th at district heating is n ot available

in all cities in Germany, less because consumers reject

the technology itself.

The presented variances in the use of energy sources

show the existence of milieu-specific differences and

underline the above-mentioned hypothesis. However, the

extent to which techn ical data such as age of the building ,

type of the building and location of the house influence

the decision for or against a certain technology still has

to be analysed. This type of investigation will be con-

ducted as part of the second part of a project that will be

funded by the German Ministry of Education and Re-

search during the next five years.

3.3. Preferred future Heating Systems

Because of the current modernization status of household

heating systems, not only the status-quo but also the

question as to which heating systems will be preferred in

the future is relevant. The set of possible answers was

generally the same as for the status-quo. Only coal-

burning stoves and night storage heaters were excluded.

These systems are declining and are thus no longer taken

into consideratio n.

A main trend which can be indentified is a declining

interest in fossil fuels. However, natural gas will still

play an important role for both milieus in the future. A

significant difference is shown with respect to heating oil.

Only 12% of the Modern Performers are interested in

using it, in contrast 34% of the Middle Class still wants

to use heating oil.

There is a positive attitude toward renewable tech-

nologies. Although the Modern Performers demonstrate

their role as leaders in innovation adaption, the Middle

Class also exhibits an interest in the use of geothermal

energy (7%), heat pumps (5%) and solar heat (25%) in

particular.

District heating is preferred by 9% of the Modern

Performers, whereas the Middle Class does not appear

interested in district heating as a future heating system.

A positive trend can be noted for small CHPs. The

Middle Class (7%) seems more open towards small

CHPs in their buildings than Modern Performers (3%).

4. Discussion and Conclusions

4.1. Lessons Learnt and Further Research

Perspectives

The empirical approach described in this article investi-

gates energy-related investment decisions of private house-

holds. The main outcome of the survey results is an ap-

parent connection between lifestyles (here: the Sinus-

Milieus®) and investment behaviour with regard to

heating systems. Therefore lifestyles were chosen as a

means to measure behaviour like the investment in en-

ergy technologies, which can be related to attitudes like

ecology-minded (e.g. Modern Performers) or conserva-

tive (e.g. Middle Class). But using lifestyles instead of

socio-demographic data (e.g. age or size of household)

has also disadvantages. One disadvantage is the continu-

ous process of change in a society. The social transfor-

mation leads to a different composition of lifestyles. The

used Sinus-Milieus® are validated empirically every year,

due to changing values, preferences and lifestyle-stru-

ctures. Thus, they can be used as a realistic instrument

for the description of the social reality.

The Sinus-approach also has the advantage – com-

pared to other classifications of milieus – to provide spa-

tially referenced lifestyle data for Germany. Such highly

resolved spatially data on lifestyles can be linked with

technical data and therefore allow analysing the invest-

ment behaviour as a function of living conditions like

building type or location of the house. However, using

the Sinus-Milieus® has a major disadv antage: Th e classi-

fication of 10 milieus leads to a realistic picture of the

German society but complicates representative empirical

surveys. The varied allocation of the Sinus-Milieus® in

society causes diverse group sizes in representative sam-

ples, especially if the survey addresses only a certain part

of the population (in the present case house owners). The

condition of homoscedasticity is thus not observed. To

compensate this shortcoming, a judgment sample is

needed which allows an equ al representatio n of all milieu

groups. Alternativel y, with a larger sample size, a rando m

Lifestyles and Their Impact on Energy-Related Investment Decisions113

Figure 6. Preferences for specific heating technologies distinguished by Sinus-Milieus®. Multiple answers were allowed.

Source: Institute for Infrastructure and Resources Management, 2010.

deletion o f over-represe nt e d milieu groups c ould be done.

Thus, the present survey will be re-conducted within

one year in the course of the second part of a project4

funded by the German Ministry of Education and Re-

search. The objective is to verify the empirical findings

taking into consideration the mentioned constraints. The

long-term scientific objective is the implementation of a

computer-supported, agent-based simulation platform

that enables researchers and decision makers to estimate

the development of heat energy demand within the resi-

dential building sector with respect to individual invest-

ments [28,29]. Using such information, regional energy

and climate concepts can be designed taken realistic ap-

proaches of action into account, and do not just consider

energy technical advice. To achieve such an objective,

further qualitative and quan titative surveys are planned to

describe the agent-specific behaviour in a more detailed

manner.

4.2. Policy Implications

As a main policy implication, this survey makes an im-

portant contribution to the discussion of environmental

compatibility and sustainability. The results provide a

“window of opp ortunity“ for sustainable us e of resources

and energy consumption and indicate that policy makers

should consider focusing on specific lifestyles for effec-

tive information campaigns. Communication processes

which are directly or indirectly related to the overall

concept of sustainab ility have to get linked to the various

attitudes and behaviour patterns.

This study emphasizes the role of Social Leaders as

leaders in the adaption of innovations in the diffusion

process of new energy technologies. As know s from lite-

rature [26] the Social Leaders are assumed as opinion

leaders and people who influence social standards. Other

milieus orient themselves by the Social Leaders and

adapt their behaviour patterns. The less innovative mi-

lieus will adapt long-term to changing conditions due to

social pressure. In the context of energy-related invest-

ment decisions this mean an increase of investments in

energy-efficient technology and the use of renewable

energies. To increase sustainability for a whole society,

communication strategies should focus on Social Leaders.

Thus, Social Leaders are a main target-group of envi-

ronmental-social approaches for promoting energy effi-

ciency improvements.

Furthermore, based on the observed link between life-

styles and decisions on energy technologies, predictions

of energy trends in private residential buildings can be

improved. Knowledge about development paths and spa-

tial referencing of lifestyles allows the use of this infor-

mation to promote sustainable consumption behaviour.

5. Acknowledgements

The empirical survey has been part of the “Path towards

an efficient energy supply system – Development of a

stakeholder-oriented municipal energy management sys-

tem in Delitzsch (Germany)” Project, which was sup-

ported by the German Ministry of Education and Re-

search. The authors gratefully acknowledge support by

the Institute of Geography of the University of Leipzig.

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