Purchasing behavior of led lightbulbs of Thai consumers

Abstract

Electricity use in residential sectors has become one of major demands for global energy production and consumption.One of today’s most energy-efficient lighting products is a Light-Emitting Diode (LED) lighting technology. The efficiency of LED lighting technology has already surpassed all other forms of lighting products such as traditional incandescent and Compact Fluorescent Lamp (CFL). Replacement with highly efficient lighting appliances like LED products could generate more than 10-15 billion USD of national energy-savings a year, or save up to 801 Mt of CO2 emissions annually. Even though LED technology have been introduced in the lighting market since 2014 coupled with its substantial price drop; the total LED adoption rate in Thailand accounted for fewer than 20% of the 4-5 billion light bulbs in use. A study to understand attitudes and behaviors of household consumers is therefore very important for governments and relevant authorities to determine effective incentive measures and promote changes in Thai consumers’ attitudes and norms towards the use of LED lighting. This underlines the necessity for Thailand to achieve the United Nations Sustainable Development (Goal 7: Ensure Access to Affordable, Reliable, Sustainable, and Modern Energy for All). This thesis analyzed three major dimensions; psychological theory dimension, behavioral economics dimension, and perception of price dimension. First, this study aims to examine the determinants of household consumers’ behaviors in purchasing energy-saving lighting products LED (Light-Emitting Diode by applying the Theory of Planned Behavior (TPB) as the main theoretical framework. Secondly, research in psychology and behavioral economics show that there are certain “behavioral anomalies” influenced and impeded consumers in making optimal decisions to maximize their utilities. In this regard, this study aimed to empirically investigate the “behavioral anomalies” within the context of LED product purchase behavior, particularly through the lens of behavioral economics. Third, in order to catch up with recent substantial decline in LED products; this study aims to present the Price Sensitivity Measurement (PSM) to determine the optimal price of energy-efficient LED bulbs. There are three main key findings of this thesis. First, the results suggested that attitude has the largest direct effect, while subjective norm was the weakest predictor of purchase intention towards LED products. An important additional finding is that attitudes have a strong direct influence on the purchasing behavior for LED products. Second, major behavioral anomalies to adopting LED bulbs at home were their (1) current satisfaction with the previous (inefficient) light bulbs and (2) habits of buying the same light bulb types, i.e., those recently adopted at home. Majority of the samples don’t know that “LED bulb has the shortest payback period” and “LED bulb is environmentally-friendly” when they were asked about the LED’s benefits. Finally, the results confirm that the optimal price point is different across two different consumer groups. LED users value the product higher due to their previous direct experience of the product’s efficiency, than those who have never experienced the product’s efficiency in energy-saving. The discrepancy between optimal prices across two different groups accounts for the incorporated WTP for premium towards energy-efficient products.The study’s findings highlight several implications for policymakers, private sectors, and green marketers in developing practical strategies, effective behavioral interventions, efficient communication messages, and pricing strategies to encourage the adoption of LED products in Thailand.