The effectiveness of home energy audits: A case study of Jackson,Wyoming

This study examines the factors that influence households to adopt modifications recommended by home energy audits and whether these audits lead to significant reductions in electricity use. Household decisions after the audits are recorded along with the corresponding recommended modifications and the offers for co-funding. A discrete choice model of the household decision after the audit is estimated. The results indicate that the potential improvement in heating efficiency from the proposed modifications increase the probability of implementing conservation measures. Co-funding offers also significantly raise the odds of accepting the modifications but are relatively less important than anticipated efficiency improvements. Several approaches are used to determine whether and how much energy is saved after the audits. Electricity demand models are estimated using data two years before and after each household audit. For households who decide to modify their houses after the audit, monthly average electricity use per square foot decreases 7%. While there is an estimated 2% reduction in electricity use attributed to the audit by households who decided not to adopt the proposed modifications, this reduction is not statistically significant, casting doubt on the presence of modifications in behavior from the audit information itself. For all households audited, the results from the electricity demand models suggest that the LVE home energy audit program reduced household electricity use 4.7%. In contrast, a differences-in-differences approach using synthetic control groups based upon a smaller but still sizeable sample of 2000 observations finds that home energy audits reduce household electricity use by more than 10%. Overall, these findings suggest that home audits result in modest but significant reductions in energy use and that co-funding encourages investments that otherwise may not be privately optimal.     

Switching the lights off: The impact of energy tariff increases on households in the Kyrgyz Republic

This paper describes an analysis of the impact that higher energy tariffs would have on households in the Kyrgyz Republic using micro-data from the 2009 Kyrgyz Integrated Household Survey. This analysis was conducted to determine which households would be most affected by higher energy tariffs and to what extent mitigation measures, such as lifeline tariffs or direct cash transfers, might lessen the impact for poor and vulnerable households. The analysis focused on first-order effects and used benefit incidence analysis and static micro-simulation to estimate the expected costs and benefits of higher energy prices and the corresponding mitigation measures. The results suggest that both the type of energy and the level of connectedness matter. Increasing tariffs for thermal power used for central heating and hot water mainly affects richer households in urban areas. Reducing implicit electricity subsidies affects the entire population due to nearly complete country coverage with electricity connections. Both lifeline tariffs and direct cash transfers could mitigate the effect of higher electricity tariffs at lower costs than universal subsidies.     

Household-level analysis of the impacts of electricity consumption on welfare and the environment in Cambodia: Empirical evidence and policy implications

Cambodia’s biomass consumption is the most dominant energy source at residential sector, and its use is mainly for cooking and heating which could affect health due to indoor air pollution. The biomass is mainly sourced from wood cutting and forest-encroachment that could impact the environment due to reduction of forest at considerable scale. By using the data 2015 of Cambodia Socio-Economic Survey, the study investigates the impacts of electricity consumption on household welfare, such as earnings and the school performance of children in the households, and further to investigate its impacts on the environment. The study found that household’s access to electricity with ability to spend on electricity consumption contributes to the positive household welfare effects and environment via a reduction of biomass consumption, and the more household spends on biomass, the more they are prone to sickness of lung problem. The study also confirmed the important role of human capital formation for the positive impact on the welfare and the environment. These findings lead to policy implications that would improve affordable access to electricity to ensure that all households can use electricity for their basic needs and productivity, and also to reduce the negative effects on environment.     

Time-varying pricing may increase total electricity consumption: Evidence from Costa Rica

We study the implementation of a time-varying pricing (TVP) program by a major electricity utility in Costa Rica. Because of particular features of the data, we use recently developed understanding of the two-way fixed effects differences-in-differences estimator along with event-study specifications to interpret our results. Similar to previous research, we find that the program reduces consumption during peak-hours. However, in contrast with previous research, we find that the program increases total consumption. With a stylized economic model, we show how these seemingly conflicted results may not be at odds. The key element of the model is that previous research used data from rich countries, in which the use of heating and cooling devices drives electricity consumption, but we use data from a tropical middle-income country, where very few households have heating or cooling devices. Since there is not much room for technological changes (which might reduce consumption at all times), behavioral changes to reduce consumption during peak hours are not enough to offset the increased consumption during off-peak hours (when electricity is cheaper). Our results serve as a cautionary piece of evidence for policy makers interested in reducing consumption during peak hours—the goal can potentially be achieved with TVP, but the cost is increased total consumption     

The behavioral response to voluntary provision of an environmental public good: Evidence from residential electricity demand

This paper develops a theory of voluntary provision of a public good in which a household's decision to engage in a form of environmentally friendly behavior is based on the desire to offset another behavior that is environmentally harmful. The model generates predictions about (1) participation in a green-electricity program at the extensive and intensive margins, and (2) changes in electricity consumption in response to participation. We test the theory using billing data for participants and nonparticipants in a green-electricity program in Memphis, Tennessee. High-consumption households are more likely to participate, and they participate at higher levels. In terms of a behavioral response, households participating above the minimum threshold level do not change electricity consumption, but those participating at the minimum threshold increase electricity consumption 2.5 percent after enrolling in the program. The result is based on identification strategies that exploit before–after differences between participants and nonparticipants, and differences in the timing of enrollment among participants only. Despite the increase in electricity demand upon the purchase of green electricity for the households with a “buy-in” mentality, the net effect for the buy-in households is a reduction in pollution emissions, as the behavioral response is not large enough to offset the environmental benefit of the green-electricity purchase.     

(En-)‘lightening’ children: Assessing the impacts of access to electricity on learning achievement levels

The welfare impacts of electrification are well documented in the literature, including the effects of electricity on school enrolment. However, the spillover effects of electrification on children's achievement levels are scarce. We use three complementary but distinct econometric models to establish a causal relationship between electrification and test scores using nationally representative household panel data from India. We find positive results irrespective of the choice of econometric model, and these results seem to be mediated by changing time-use patterns of children with access to electricity. We first exploit the plausibly exogenous variation in access to electricity due to a universal electrification program in the state of West Bengal in India and we find positive effects of electrification on children's test scores. By age group, we find that younger cohorts benefit more in terms of their reading scores than older cohorts. Then, to ascertain external validity of these results, we replicate them over a nationally representative sample using fixed effects and instrumental variables estimation and find similar results. At the intensive margin, we find that access to more hours of electricity positively affects test scores. We identify an increase in time spent by children on study-related activities as the potential channel for these results.     

Household internal and external electricity contract switching in EU countries

Using a representative sample of more than 13,000 households from eight countries in the European Union (EU), this article empirically studies the factors related to household electricity contract switching by distinguishing between internal switchers (households that switched contracts but stayed with the same supplier) from external switchers (households that switched to a new supplier). The econometric analysis includes individual preferences, household structural factors and socio-demographic characteristics, as well as electricity market characteristics. The study explicitly explores the role of risk and time preferences on switching behaviours, with risk and time preferences elicited through incentivized experiments as well as self-assessment scales. The main results suggest that internal and external switching are not related to the same factors, that risk and time preferences affect switching behaviours, and that renters are less likely to switch than homeowners; further, electricity market characteristics are found to affect household electricity contract switching.     

Household Electricity Demand, Revisited

Recent efforts to restructure electricity markets have renewed interest in assessing how consumers respond to price changes. This paper develops a model for evaluating the effects of alternative tariff designs on electricity use. The model concurrently addresses several interrelated difficulties posed by nonlinear pricing, heterogeneity in consumer price sensitivity, and consumption aggregation over appliances and time. We estimate the model using extensive data for a representative sample of 1300 California households. The results imply a strikingly skewed distribution of household electricity price elasticities in the population, with a small fraction of households accounting for most aggregate demand response. We then estimate the aggregate and distributional consequences of recent tariff structure changes in California, the consumption effects of which have been the subject of considerable debate.     

Greenhouse Gas Abatement Cost Curves of the Residential Heating Market: A Microeconomic Approach

In this paper, we develop a microeconomic approach to deduce greenhouse gas abatement cost curves of the residential heating sector. Our research is based on a system dynamics microsimulation of private households’ investment decisions for heating systems to the year 2030. By accounting for household-specific characteristics, we investigate the welfare costs of different abatement policies in terms of the compensating variation and the excess burden. We investigate two policies: (i) a carbon tax and (ii) subsidies on heating system investments. We deduce abatement cost curves for both policies by simulating welfare costs and greenhouse gas emissions to the year 2030. We find that (i) welfare-based abatement costs are generally higher than pure technical equipment costs; (ii) given utility maximizing households a carbon tax is the most welfare-efficient policy and; (iii) if households are not utility maximizing, a subsidy on investments may have lower marginal greenhouse gas abatement costs than a carbon tax.     

Air conditioning and electricity expenditure: The role of climate in temperate countries

This paper investigates how households adopt and use air conditioning to adapt to climate change and increasingly high temperatures, which pose a threat to the health of vulnerable populations. The analysis examines conditions in eight temperate, industrialized countries (Australia, Canada, France, Japan, the Netherlands, Spain, Sweden, and Switzerland). The identification strategy exploits cross-country and cross-household variations by matching geocoded households with climate data. Our findings suggest that households respond to excess heat by purchasing and using air conditioners, leading to increased electricity consumption. Households on average spend 35%–42% more on electricity when they adopt air conditioning. Through an illustrative analysis, we show that climate change and the growing demand for air conditioning are likely to exacerbate energy poverty. The number of energy poor who spend a high share of income on electricity increases, and households in the lowest income quantile are the most negatively affected.     

Cohort,age and time effects in alcohol consumption by Italian households: a double-hurdle approach

This paper describes the life-cycle alcohol consumption patterns of Italian households by decomposing gender, cohort, age and time effects and estimates the importance of demographic characteristics using a double-hurdle model. The application is based on ISTAT households expenditure survey for the period 1997–2002 organized in cohorts. As expected, cohort and age effects are significant in both participation and consumptions. The significance of gender and geographic differences suggests important policy implications.      

Losers amongst the Losers:: The welfare effects of the great recession across cohorts

This paper studies the effect of deep recessions on intergenerational inequality by quantifying the welfare effects on households at different phases of the life cycle. Deep recessionary episodes are characterized by large declines in the prices of real and financial assets and in employment. The former levies high welfare costs on older households who own financial wealth, the latter determines labour income losses and destroys the human capital of younger cohorts, lowering their productivity. The paper extends previous analyses in the literature by including permanent labour income losses in an OLG model calibrated to match the Great Recession. The analysis shows that younger households lose more than double of all other living cohorts, as younger household become unemployed and experience a decline in their future income. The dynamics of households’ consumption and portfolio composition between 2007 and 2013 in the US are consistent with the predictions of the model.     

村落公共空间的农户认知与支付意愿——以河南省双沟村为例的经验研究

通过对河南省双沟村75家农户的深入访谈,运用Logistic二元选择模型对影响农户公共空间的支付意愿进行分析。结果表明,所有农户都认为公共空间受到不同程度的破坏,大多数农户认为无论是破坏还是改善都存在政府不作为。农户对公共空间的支付意愿受个体特征、农户特征和认知特征的共同制约,支付意愿普遍较低。年龄和学历与支付意愿负相关;职业与之呈显著正相关;农户家庭农业收入和非农收入与之具有统计上的正相关,但系数较小,实际意义并不明显;农户认为公共空间破坏越严重,越易产生支付意愿。农户对村域公共空间的认知及其支付意愿对村域治理有重要的政策含义,社会主义新农村建设应重视公共空间在村庄的稳定和发展中的作用。     

Past and present outage costs – A follow-up study of households’ willingness to pay to avoid power outages

Households’ demand for electricity continues to increase. This trend per se should indicate increased disutility from power outages. Additionally, batteries and other back-up systems have been improved, and the frequency and duration of outages have been reduced in many countries. By comparing the results from two stated preference studies on Swedish households’ willingness to pay (WTP) to avoid power outages in 2004 and 2017, we investigate whether the WTP has changed. The WTP is assessed for power outages of 1- and 4 -h durations, and whether it is planned or unplanned. We find three main differences: (i) the proportion of households stating zero WTP to avoid power outages decreased significantly from 2004 to 2017, meaning that more households are willing to pay to avoid a power outage in 2017 than in 2004; (ii) the overall WTP was considerably higher in 2017 than in 2004, but (iii) the conditional WTP, that is, WTP for those that have a positive WTP for an outage, has decreased. These results have implications for how regulators incentivize and regulate electricity suppliers, because the results suggest that a reliable supply of electricity is of greater importance now than what the literature has suggested.     

On the redistributive effects of Germany’s feed-in tariff

This article assesses the redistributive effects of a key element of German climate policy, the promotion of renewables in the electricity generation mix through the provision of a feed-in tariff. The tariff shapes the distribution of households’ disposable incomes by charging a levy that is proportional to household electricity consumption and by transferring financial resources to households who are feeding green electricity into the public grid. Our study builds on representative household survey data, providing information on various socio-demographics, household electricity consumption, and ownership of photovoltaic facilities. The redistributive effects of the feed-in tariff are evaluated by means of inequality indices. All the indices indicate that Germany’s feed-in tariff is regressive.     

Do environmental benefits matter? Evidence from a choice experiment among house owners in Germany

Residential buildings strongly contribute to global CO₂ emissions due to the high energy demand for electricity and heating, particularly in industrialised countries. Within the EU, decentralised heat generation is of particular relevance for future climate policy, as its emissions are not covered by the EU ETS. We conducted a choice experiment concerning energy retrofits for existing houses in Germany. In the experiment, the approximately 400 sampled house owners could either choose a modern heating system or an improved thermal insulation for their home. We used standard and mixed logit specifications to analyse the choice data. We found environmental benefits to have a significant impact on choices of heating systems. However, they played no role in terms of insulation choices. Based on the estimated mixed logit model, we further obtained willingness-to-pay (WTP) measures for CO₂ savings.     

Examining energy poverty in Chinese households: An Engel curve approach

This article is first to model energy poverty in Chinese households using an Engel curve approach. To analyse the determinants of energy poverty and energy expenditures across households, we avail the 2015 wave of the Chinese General Social Survey (CGSS). Possible presence of endogeneity is accounted for in the model specification as well as by using the Lewbel heteroscedasticity identified endogenous variables estimator. In addition, we are the first to scrutinise disparity and discrimination by conducting the Blinder–Oaxaca decomposition of energy poverty model by gender, ethnicity, region (Eastern vs. non-Eastern provinces), and urbanisation status (rural vs. urban residents). Our analysis shows: (i) education is the key determinant of various energy poverty measures and energy expenditure shares across Chinese households; (ii) other determinants including fossil fuel mix and electricity price discrimination are found to worsen energy poverty, on average. However, fossil fuel mix is found to increase expenditure share of total energy, electricity, and coal and decrease that of biomass; and (iii) the Blinder–Oaxaca decomposition analyses show no statistically significant gender or ethnic discrimination in energy poverty rates. However, there is substantial divide between Eastern and non-Eastern provinces and between rural and urban households—with these groups also discriminated against when accessing clean cooking fuels and technologies. The Blinder–Oaxaca results also generally support the logistic and the Lewbel energy poverty model findings.     

Fuel poverty and access to electricity: comparing households when they differ in needs

Although sequential stochastic dominance techniques have been used in the literature to make comparisons of income poverty which are robust to the assumptions made about the economies of scale within households, the techniques could be applied to a much wider set of issues. In this paper, these techniques are applied to energy deprivation in Guatemala. Fuel poverty is compared among households with and without access to electricity, and it is assessed whether access to electricity for those who do not have access currently would eliminate the observed difference in fuel poverty between the two groups of households.     

The flexibility of household electricity demand over time

Empirical estimates of long run effects on residential electricity demand from changes in the electricity price are usually estimated by cross-sectional variation in the current stock of electric household appliances across households at a certain point in time. Here, we use a discrete–continuous approach modeling the long run effects by investments in new appliances. We apply the annual Norwegian Survey of Consumer Expenditure for the period 1975 to 1994 to estimate the short and long run own price elasticities in the two approaches. We find the estimated long run elasticity only slightly more price elastic than the short run. We also find that the long run elasticity does not differ significantly between the two approaches. The reason for both results is that, since there is no alternative source of energy for these appliances, there are no substitution effects.     

Regulatory Circumvention and the Holding Company

A rapidly growing number of households are suffering from energy impoverishment caused by escalating electricity prices, low income, and poor housing energy efficiency. Many households are experiencing considerable hardship in paying energy bills. This manifestation of inequality has followed the global restructuring of electricity sectors, and its incidence has become widespread across Europe, the UK, the US, New Zealand, and Australia. Current policy measures generally resemble "retrospective compensation" rather than addressing the root cause of the problem. This paper argues for a new policy approach that reconfigures electricity price formation in order to address this increasingly embedded social phenomenon.