implications of this research are that future energy-conservation campaigns should stress the comfort-related benefits of home insulation as well as energy savings rather than focusing solely on the cost-effectiveness of insulation. It is concluded that consumers are making rational choices but ones that go beyond a straightforward tradeoff between financial costs and benefits.
Since 1977 a major energy efficiency program for the domestic sector in Britain has been the promotion of basic insulation in homes. The program has two components: a grant scheme for approved insulation measures including attic and hot water tank insulation, and campaigns in the mass media with the general themes that energy should not be wasted and that insulation is cost-effective in terms of energy-cost savings against capital outlay.
Such an energy efficiency program, which is typical of many countries (cf. Joerges and Mueller 1984) carries certain assumptions about the way consumers manage their household energy budgets. Consumers, it is assumed, could be rational economic actors and use less energy if only they knew "what to do" about their energy use and found that "what to do" was in their economic interest.
Thus, on the one hand, media campaigns improve the flow of information and advice, thereby providing the knowledge for rational choices, while on the other hand energy price rises or subsidies for insulation make energy-saving investments more attractive because both act to make such investments more economically advantageous by reducing the payback period. During the period of this energy efficiency program the penetration of insulation measures in the housing stock has increased. In 1977, 56 percent of homes where attics could be insulated were: by 1982 the figure was 83 percent. Similarly, hot water tank insulation has increased from 75 to 90 percent. For other insulation measures that have not been grant-aided the participation rate is lower: cavity wall infill stands at 10 percent and double-glazing 20 percent. These measures are not only ineligible for grants but also entail both higher capital costs and longer payback periods. There is no available evidence on the extent to which the increases in attic and hot water tank insulation can be attributed directly to the government program. However it is possible to assess whether the implicit model of consumer rationality