The purpose of this study is to examine how households opt for their loan’s duration when it comes to energy efficiency retrofits (EERs). The primary focus is on the time horizon that these types of EERs will provide benefits to the households.
This study examines the second wave of the largest EER support program in Greece in recent years. The authors exploit an idiosyncrasy of the support program which offered interest-free loans. The baseline sample of this study includes approximately 18,000 households awarded the support and opted for a loan. To provide robustness and complement the analysis, the authors also use data from 38,000 households that were awarded support from the first wave of the EER program.
This study finds that EER investments that are likely to deliver longer-term benefits, in the form of energy savings, are positively associated with longer duration. This finding implies that households view such EERs as long-term investments that will consistently provide benefits in the future, thereby tolerating a longer period of incurring the inconvenience of paying monthly installments.
This study posits that an EER can be perceived by the household as an investment that saves money in the long term because of more efficient energy use. To this end, the authors bring forward the duration of the benefits accrued to the household as a driving factor to the household’s decision over the length of the loan.
This study expands on prior literature that has focused on consumer and loans for durables (e.g. cars) by examining EERs. However, EERs are different, as they can save households money in future periods. In addition, house EERs are at the forefront of energy policies and the design of future support programs at the epicenter of several initiatives.
The purpose of this paper is to examine the volatility spillover and lead-lag relationship between the Chicago Board Options Exchange volatility index (VIX) and the major agricultural future markets before and during the Coronavirus disease 2019 (COVID-19) outbreak.
The methods used were the vector autoregression-Baba, Engle, Kraft and Kroner-generalized autoregressive conditional heteroskedasticity method, the Wald test and wavelet transform method.
The findings indicate that prior to the COVID-19 outbreak, there was a two-way volatility spillover impact between the majority of the sample markets. In comparison, volatility transmission between the VIX index and the agricultural future market was significantly lower following the COVID-19 outbreak, the authors observed greater coherence at higher frequencies than at lower frequencies, implying that the interdependence between the two VIX indices and the agricultural future market was stronger over a longer time-frequency domain and the VIX’s signalling effect on various agricultural future prices after the COVID-19 outbreak was significantly lower.
The authors conducted the first comprehensive investigation of the VIX’s correlation with major agricultural futures, especially during COVID-19. The findings contribute to a better understanding of the risk transmission mechanism between the VIX and major agricultural commodities futures contracts. And our findings have significant implications for investors and portfolio managers, as well as for policymakers who are concerned about the price of agricultural futures.
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