Energy-Related Financial Literacy and Retrofits of Soviet-Era Apartment Buildings: The Case of Lithuania

This paper extends the literature on energy-related financial literacy by examining its role in collective energy retrofit investment decisions in Soviet-era countries, which suffer from suboptimal levels of these investments, purportedly due to a lack of energy-specific knowledge and financial skills as well as low levels of trust. We investigate whether energy-related financial literacy and trust help explain collective energy retrofit investment decisions of typical Soviet-built multi-dwelling buildings in the case of Lithuania. Using unique survey data from Lithuania, we find that individuals' willingness to invest in multi-dwelling building energy retrofits is positively associated with individuals' general financial literacy, energy literacy, and energy-related financial literacy. Furthermore, we show that individuals' trust in institutions that are directly involved in the house-retrofitting process is an important predictor for multi-dwelling building energy retrofit decisions.