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Energy Journal Issue

The Energy Journal
Volume 39, Number 4

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A Top-Down Economic Efficiency Analysis of U.S. Household Energy Consumption

J. Wesley Burnett and Jessica Madariaga

DOI: 10.5547/01956574.39.4.jbur
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This study analyzes the efficiency of household-level energy consumption using a rich microdata set of homes within the United States. We measure efficiency by extending a cost-minimization model that treats the total amount of energy services produced as latent or unobserved due to technological differences in household consumption. The empirical strategy consists of applying latent class modeling to cost frontier analysis, which helps to identify heterogeneous subsets of units that require the fewest energy resources. Our estimates of efficient units form an empirical cost frontier of best practices within each subset. In order to understand the determinants of household-level energy efficiency, we condition the cost frontier analysis on numerous physical, climate-related, and socio-economic characteristics of the household. We find that state-level energy building code regulations, on average, induce a one-to-four percent marginal increase in household energy consumption.

Simultaneous use of black, green, and white certificate systems

Eirik S. Amundsen and Torstein Bye

No Abstract

Directed Technical Change and Energy Intensity Dynamics: Structural Change vs. Energy Efficiency

Christian Haas and Karol Kempa

DOI: 10.5547/01956574.39.4.chaa
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This paper uses a model with Directed Technical Change to theoretically analyse observable heterogeneous energy intensity developments. Based on the empirical evidence, we decompose changes in aggregate energy intensity into structural changes in the economy (structural effect) and within-sector energy efficiency improvements (efficiency effect). The relative importance of these effects is determined by energy price growth and sectoral productivities that drive the direction of technical change. When research is directed to the labour-intensive sector, the structural effect is the main driver of energy intensity dynamics. In contrast, the efficiency effect dominates energy intensity developments, when research is directed to energy-intensive industries. Increasing energy price generally leads to lower energy intensities and temporal energy price shocks might induce a permanent redirection of innovation activities. We calibrate the model to empirical data and simulate energy intensity developments across countries. The results of our very stylised model are largely consistent with empirical evidence.

The Role of Attitudes and Marketing in Consumer Behaviours in the British Retail Electricity Market

Miguel Flores and Catherine Waddams Price

DOI: 10.5547/01956574.39.4.mflo
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We examine characteristics associated with consumer (dis)engagement in the residential electricity market, a topic of increasing policy interest and intervention, introducing consumer attitudes and marketing recall as new factors. General attitudes are closely associated with electricity market activity, with considerable variation in the strength and statistical significance of these relationships, indicating very different motivations amongst consumers. Recall of direct marketing routes has little identifiable effect, while advice of family and friends is influential. We identify implications for communication by both suppliers and policy makers seeking to improve the functioning of such markets, including the necessity for a variety of approaches.

Have Model, Will Reform? Assessing the Outcome of Electricity Reforms in Non-OECD Asia

Anupama Sen, Rabindra Nepal, and Tooraj Jamasb

DOI: 10.5547/01956574.39.4.asen
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Non-OECD Asian economies comprise about 34% of world primary energy demand, 60% of population and 65% of the world's poor, and will account for more than 60% of the total increase in energy consumption between 2015 and 2040. Energy sector reforms in non-OECD Asia are thus significant for global energy use, sustainability and socio-economic welfare. The region has experienced a slow and difficult reform path and after more than two decades of reform efforts it is time to take stock of their outcomes. Using a novel dataset assembled for this purpose for the period 1990-2013 for 17 non-OECD Asian countries, we apply instrumental variables regression techniques to several electricity sector reform outcome models. We find that the standard reform model has had limited benefits, largely due to sectoral heterogeneity and institutional endowments. We also show empirical evidence of the theoretical trade-offs between technical efficiency, economic and welfare objectives of reforms. The results call for rethinking of the effectiveness of reforms and awareness of the effects of key reform steps on different outcomes. This is useful for balancing the trade-offs among competing reform objectives.