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Energy Consumption in the French Residential Sector: How Much do Individual Preferences Matter?

Salomé Bakaloglou and Dorothée Charlier

Year: 2019
Volume: Volume 40
Number: Number 3
DOI: 10.5547/01956574.40.3.sbak
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Abstract:
The aim of this research is to understand the impact of preference heterogeneity in explaining energy consumption in French homes. Using a discrete-continuous model and the conditional mixed-process estimator (CMP) enable us to address two potential endogeneities in residential energy consumption: energy prices and the choice of home energy characteristics. As a key contribution, we provide evidence that a preference for comfort over saving energy does have significant direct and indirect impacts on energy consumption (through the choice of dwelling), particularly for high-income households. Preferring comfort over economy or one additional degree of heating implies an average energy overconsumption of 10% and 7.8% respectively, up to 18% for high-income households. Our results strengthen the belief that household heterogeneity is an important factor in explaining energy consumption and could have meaningful implications for the design of public policy tools aimed at reducing energy consumption in the residential sector.



The Role of Uncertainty in Shaping Individual Preferences for Residential Energy Renovation Decisions

Salomé Bakaloglou and Fateh Belaïd

Year: 2022
Volume: Volume 43
Number: Number 4
DOI: 10.5547/01956574.43.4.sbak
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Abstract:
This article examines a crucial question that has been raised in recent years in both policy and economic literature: the role of uncertainty as a barrier to energy retrofit decisions. We develop a discrete choice experiment to elicit preferences for energy renovation measures. This methodologically innovative experiment design includes two insurance schemes covering potential sources of uncertainty as attributes of the energy retrofit alternatives. We use a mixed logit model to investigate the nature of systematic heterogeneity in household preferences for attributes of energy retrofit solutions. The article shows that uncertainties related to future energy pricing and retrofit quality are negatively perceived during energy-renovation decision making. This impact varies according to household characteristics such as risk aversion and perceptions of the economic context. The results suggest that public policies should support and accompany the development of insurance schemes to increase energy renovation rates.





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