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The Economics of Gas Utilizationin a Gas-Rich, Oil-Poor Country: The Case of Bangladesh

Gulder Schramm

Year: 1983
Volume: Volume 4
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No1-3
View Abstract

Abstract:
It has become an article of faith that clean-burning, low-polluting natural gas is a premium fuel and that on a net heat basis it is inherently more valuable than its closest competitor, fuel oil. This conclusion has been drawn by comparing pollution characteristics of both fuels. While the conclusion is correct, it is correct only in regions that have free access to both natural gas and oil delivered to the user's premises at similar costs per Btu.



Solar Versus Conservation Tax Credits

H. Craig Petersen

Year: 1985
Volume: Volume 6
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol6-No3-12
View Abstract

Abstract:
In the late 1970s concern about energy shortages motivated Congress to establish federal income tax credits to individuals for (1) household energy conservation expenditures and (2) purchases of renewable energy systems. Under terms of the Energy Tax Act of 1978, the tax credit for conservation expenditures is 15 percent of the amount invested, with a maximum credit of $300. The credit for renewable energy systems (such as solar space or water heaters) was initially set at 30 percent of the first $2000 and 20 percent of the next $8000. In 1980, the Windfall Profit Tax Act increased the tax credit for renewable energy systems to 40 percent of the first $10,000 in qualifying expenditures-a maximum credit of $4000.



Energy Pricing and Household Energy Consumption in India

Ramesh Bhatia

Year: 1988
Volume: Volume_9
Number: Special Issue 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol9-NoSI1-4
No Abstract



Cold Hands, Warm Hearth? Climate, Net Takeback, and Household Comfort

Peter M. Schwarz and Thomas N. Taylor

Year: 1995
Volume: Volume16
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol16-No1-3
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Abstract:
Insulation reduces marginal heating cost and may lead to a takeback effect of higher wintertime thermostat settings, with a consequent dilution of energy savings. Alternatively, additional insulation could permit a lower thermostat setting by reducing drafts and radiation while increasing moisture retention, thereby enhancing comfort. This paper evaluates thermostat net takeback, the difference between takeback and enhanced comfort. Evidence supports the existence of both effects, with net takeback at the low end of literature estimates. Net thermostat takeback is on the order of 0.05 degrees F, leading to an energy takeback that ranges from 1-3% of potential energy savings, depending on climate and house size. Other significant determinants of thermostat are heating energy price and the presence of elderly or young occupants.



The Welfare Effects of Raising Household Energy Prices in Poland

Caroline L. Freund and Christine I. Wallich

Year: 1996
Volume: Volume17
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No1-4
View Abstract

Abstract:
We examine the welfare effects from increasing household energy prices in Poland. Subsidizing household energy prices, common in the transition economies, is shown to be highly regressive. The wealthy spend a larger portion of their income on energy and consume more energy in absolute terms. We therefore rule out the oft-used social welfare argument for delaying household energy price increases. Raising prices, while targeting relief to the poor through a social assistance program is the first-best response. However, if governments want to ease the adjustment, several options are open, including: in-kind transfers to the poor, vouchers, in-cash transfers, and lifeline pricing for electricity. Our simulations show that if raising prices to efficient levels is not politically feasible at present and social assistance targeting is sufficiently weak, it may be socially better to use lifeline pricing and a large price increase than an overall, but smaller, price increase.



Micro Econometric Modelling of Household Energy Use: Testing for Dependence between Demand for Electricity and Natural Gas

Soren Leth-Petersen

Year: 2002
Volume: Volume23
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol23-No4-3
View Abstract

Abstract:
This paper contains a micro econometric analysis of household electricity and natural gas demand for a cross section of 2,885 Danish households observed in 1996. The sample includes fulltime employed couples in single family houses. The specification of the model is guided by an explorative nonparametric data analysis. The analysis reveals, among other things, the fairly surprising result that demand for heating is unaffected by the number of children in the household. The dependence between demand for gas and demand for electricity is examined in the paper. This is done by testing for separability of demand for gas from demand for electricity, and vice versa. Separability of electricity (gas) from gas (electricity) is tested by estimating demand for electricity (gas) conditional on demand for gas (electricity). The model allows for endogeneity of the conditional variable. Building regulations and individual time variation, that is panel data, identify the test. The test indicates that demand for electricity is separable from demand for natural gas, and that demand for natural gas is separable from demand for electricity. The result of the test is evidence in favour of single equation modelling of household energy demand in this context.



Habit Formation and Consumption of Energy for Heating: Evidence from a Panel of Danish Households

Soren Leth-Petersen

Year: 2007
Volume: Volume 28
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol28-No2-2
View Abstract

Abstract:
In this paper we ask if consumption of energy for space heating by households is habit forming. A model of intertemporal consumption allocation allowing for habit-forming preferences is estimated on a register-based panel data set with high quality information about consumption of natural gas for a sample of Danish households. Results indicate that preferences are weakly habit forming.



Household Energy Demand and the Equity and Efficiency Aspects of Subsidy Reform in Indonesia

Susan Olivia and John Gibson

Year: 2008
Volume: Volume 29
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol29-No1-2
View Abstract

Abstract:
The proper design of price interventions in energy markets requires consideration of equity and efficiency effects. In this paper, budget survey data from 29,000 Indonesian households are used to estimate a demand system for five energy sources, which is identified by the spatial variation in unit values (expenditures divided by quantities). We correct for the various quality and measurement error biases that result when unit values are used as proxies for market prices. The price elasticities are combined with tax and subsidy rates to calculate the marginal social cost of price changes for each item. The results suggest that even with high levels of inequality aversion there is a case for reducing the large subsidies on kerosene in Indonesia, supporting the reforms that have been announced recently.



Necessity or Luxury Good? Household Energy Spending and Income in Britain 1991-2007

Helena Meier, Tooraj Jamasb, and Luis Orea

Year: 2013
Volume: Volume 34
Number: Number 4
DOI: 10.5547/01956574.34.4.6
View Abstract

Abstract:
In recent years, many households around the world have experienced reductions in real incomes and higher energy prices, both of which have important demand and welfare implications. A better understanding of the socio-economic determinants of household energy demand and spending is therefore important from a welfare perspective. This is particularly useful in the case of liberalised energy markets where there is a need to devise new and innovative energy policies for the residential sector. This paper explores British household spending on energy in total and on electricity and gas separately. As the relative importance of essential or luxury services of energy varies with income, we focus our analysis on this driver of energy spending and estimate Engel spending curves using static and dynamic models for a panel dataset comprising over 77,000 observations for the 1991-2007 period. The lack of household level price data is common in liberalized retail energy markets. This issue is addressed by a new modeling approach based on within and between differences in regional energy prices. We find that the Engel spending curves are S-shaped. Income elasticities for energy spending are, however, U-shaped and smaller than unity, suggesting that energy services are a necessity for households.



Household energy demand in Urban China: Accounting for regional prices and rapid income change

Jing Cao, Mun S. Ho, and Huifang Liang

Year: 2016
Volume: Volume 37
Number: China Special Issue
DOI: 10.5547/01956574.37.SI1.jcao
View Abstract

Abstract:
Understanding the rapidly rising demand for energy in China is essential to efforts to reduce the country's energy use and environmental damage. In response to rising incomes and changing prices and demographics, household use of various fuels, electricity and gasoline has changed dramatically in China. In this paper, we estimate both income and price elasticities for various energy types using Chinese urban household micro-data collected by National bureau of Statistics, by applying a two-stage budgeting AIDS model. We find that total energy is price and income inelastic for all income groups after accounting for demographic and regional effects. Our estimated electricity price elasticity ranges from - 0.49 to -0.57, gas price elasticity ranges from -0.46 to -0.94, and gasoline price elasticity ranges from -0.85 to -0.94. Income elasticity for various energy types range from 0.57 to 0.94. Demand for coal is most price and income elastic among the poor, whereas gasoline demand is elastic for the rich.




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