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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.



Behavioral Anomalies and Energy-related Individual Choices: The Role of Status-quo Bias

Julia Blasch and Claudio Daminato

Year: 2020
Volume: Volume 41
Number: Number 6
DOI: 10.5547/01956574.41.6.jbla
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Abstract:
The literature on the energy-efficiency gap discusses the status-quo bias as a behavioral anomaly that potentially increases a household�s energy consumption. We empirically investigate the extent to which the status-quo bias is linked to residential electricity consumption through two channels: non-replacement of old appliances and overuse of appliances. Using data from a large household survey conducted in three European countries, we find that our measure of status-quo bias is a significant predictor of both the age of home appliances and the level of a household�s consumption of energy services. This is also reflected in the total electricity consumption, which is found to be around 6% higher when the household head is status-quo biased. We thus provide empirical evidence that the status-quo bias may represent a substantial barrier to increasing residential energy efficiency. Our findings prompt policy makers to design instruments that take this barrier into account.



Residential and Industrial Energy Efficiency Improvements: A Dynamic General Equilibrium Analysis of the Rebound Effect

Sondès Kahouli and Xavier Pautrel

Year: 2023
Volume: Volume 44
Number: Number 3
DOI: 10.5547/01956574.44.2.skah
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Abstract:
The aim of this paper is to investigate bi-directional spillovers into residential and industrial sectors induced by energy efficiency improvement (EEI) in both the short- and long-term, and the impact of nesting structure as well as the size of elasticities of substitution of production and utility functions on the magnitude and the transitional dynamic of rebound effect. Developing a dynamic general equilibrium model, we demonstrate that residential EEIs spillover into the industrial sector through the labor supply channel and industrial EEIs spillover into the residential sector through the conventional income channel. Numerical simulations calibrated on the U.S. suggest that not taking into account these spillover effects could lead to misestimating the rebound effect notably of residential sector EEIs. We also demonstrate how the size and the duration of the rebound effect depend on the elasticities of substitution’s values. Numerical simulations suggest that alternative sets of value for the elasticities of substitution may give different sizable patterns of rebound effects in both the short- and long-term. In policy terms, our results support the idea that energy efficiency policies should be implemented simultaneously with rebound effect offsetting policies by considering short- and long-term economy feedbacks. As a consequence, they require considering debates about what type of policy pathways are more effective in mitigating the rebound effect.





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