Building vintage and electricity use: Old homes use less electricity in hot weather

This paper studies whether electricity use in newer or older residential buildings rises more in response to high temperature in a region of Southern California. Peak electricity demand occurs at the highest temperatures which are predicted to increase due to climate change. Understanding how newer buildings differ from older buildings improves forecasts of how peak electricity use will grow over time. Newer buildings are subject to stricter building energy codes, but are larger and more likely to have air conditioning; hence, the cumulative effect is ambiguous. This paper combines four large datasets of building and household characteristics, weather data, and utility data to estimate the electricity–temperature response of different building vintages. Estimation results show that new buildings (1970–2000) have a statistically significantly higher temperature response (i.e., use more electricity) than old buildings (pre1970). Auxiliary regressions with controls for tiered electricity prices, number of bedrooms, income, square footage, central air conditioning, ownership, and type of residential structure partially decompose the effect. Though California has had extensive energy efficiency building standards that by themselves would lower temperature response for new buildings, the cumulative effect of new buildings is an increase in temperature response. As new buildings are added, aggregate temperature response is predicted to increase.     

A pseudo-panel data model of household electricity demand

We study the dynamic behaviour of household electricity consumption on the basis of four large independent surveys conducted in the province of Québec from 1989 to 2002. The latter region displays some rather unique features such as the very extensive use of electricity for space heating in a cold climate and the wide range of energy sources used to meet space heating requirements. We adopt Deaton (1985) approach to create 25 cohorts of households that form a pseudo-panel. The cohorts have on average 131 households. The model error terms allow for group heteroskedasticity and serial correlation. Short-run and long-run own and cross-price elasticities are statistically significant. Electricity and natural gas are estimated to be substitutes while electricity and fuel oil are complements, as it may occur in the Quebec context. The estimate of the income elasticity is not significant. Comparisons with related studies are provided.     

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.     

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.     

The internalization of externalities in the production of electricity: Willingness to pay for the attributes of a policy for renewable energy

This paper investigates the willingness to pay of a sample of residents of Bath, England, for a hypothetical program that promotes the production of renewable energy. Using choice experiments, we assess the preferences of respondents for a policy for the promotion of renewable energy that: (i) contributes to the internalization of the external costs caused by fossil fuel technologies; (ii) affects the short-term security of energy supply; (iii) has an impact on the employment in the energy sector; and (iv) leads to an increase in the electricity bill. Responses to the choice questions show that our respondents are in favour of a policy for renewable energy and that they attach a high value to a policy that brings private and public benefits in terms of climate change and energy security benefits. Our results therefore suggest that consumers are willing to pay a higher price for electricity in order to internalize the external costs in terms of energy security, climate change and air pollution caused by the production of electricity.     

Family decision-making for educational expenditure: new evidence from survey data for Nigeria

This study examines the determinants of educational expenditures by households in Nigeria. Data from the Nigerian General Household Survey, Panel 2012/2013, Wave 2 was used and a double-hurdle model was employed for the analysis. The results suggest household income, the age, education, gender of the household heads and urban versus rural residence have a significant impact on the decision to spend on education. Such expenditures are income elastic overall, but are very different in magnitude for low income compared to higher income families. It is found that the income elasticity of education expenditures are approximately four times greater for households in the bottom two-thirds of the income distribution than for those on the top one-third of the income distribution.     

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.     

Cooling China： The Weather Dependence of Air Conditioner Adoption

One of the major adaptation mechanisms to climate change is increased demand for cooling via the air conditioning of indoor environments. China＇s demand for air conditioners has displayed explosive growth since 1995. This paper provides estimates of the income and short run weather sensitivity of air conditioner adoption across urban areas for 29 Chinese provincial entities. We show that the adoption decision displays significant income and weather sensitivity in the short run, with adoption being higher the year following a hot summer.     

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.     

取消燃气和电力补贴对我国居民生活的影响

分析取消能源补贴对居民生活的影响是完善能源补贴改革的重要基础。本文首先应用价差法估算了中国2007年燃气和电力的补贴规模;其次考虑到中国居民贫富与区域差异,将城乡居民按收入水平分为10组,引入"能源预算"概念并设计"影响指数"、"承受力指数"等核心指标,结合投入产出模型,从直接和间接两方面综合研究了取消燃气和电力补贴对不同收入阶层居民生活的影响,分析结果表明无论从直接影响还是间接影响的角度,取消燃气和电力补贴对低收入阶层居民,尤其是农村低收入居民的冲击更大。最后基于实证分析结果,提出阶梯化定价机制与补贴转移等能够让低收入阶层居民真正获益的能源补贴改革建议。     

Income and price elasticities of electricity demand in Australia: Evidence of state‐specific heterogeneity

This paper estimates country‐wide and state‐level income and price elasticities of electricity demand in Australia for the period 1999Q1–2013Q2 using the National Electricity Market data and the autoregressive‐distributed lag model. The results suggest that the long‐run income and price elasticities are inelastic and are statistically significant with theoretically consistent signs. The country‐wide income and price elasticities are estimated to be 0.41 and ?0.38, respectively. It is also found that there exists state‐specific heterogeneity in both speed and magnitude of the electricity consumption adjustment in response to changes in income and electricity price. These results have important policy implications, including the need to use state‐specific elasticities in the scenario analysis of the energy pricing policy.     

The effect of climate change on optimal wetlands and waterfowl management in Western Canada

Warmer temperatures and a decrease in precipitation in the 21st century could severely deplete wetlands in the prairie pothole region of western Canada. In this study, we employ linear regression analysis to determine the casual effect of climate change on wetlands in this region, with temperature, precipitation and the standardized precipitation index (SPI) used to predict the effect of potential climate change on wetlands. We then use a waterfowl-wetlands bioeconomic model to solve for socially optimal levels of duck harvests and wetlands retention under current climate conditions and various climate change scenarios. The model maximizes benefits to hunters plus the amenity values of ducks to non hunters and the non-market ecosystem benefits of wetlands. Results indicate that climate change could decrease wetlands by between 7 and 47%, and that the optimal number of wetlands to retain could decrease by as much as 38% from the baseline climate.     

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.     

Non-farm Income and Consumption Expenditures in Rural Bangladesh: Empirical Evidence from Multilevel Regression Modelling

This study examines the effects of non-farm income on household consumption expenditures in rural Bangladesh. A two-stage endogenous treatment effect model is built on data from a nationally representative Household Income Expenditure Survey (HIES) 2010 to control selection bias. The HIES follows a hierarchical data structure because the survey is based on two-stage stratified sampling. A multilevel mixed-effects linear regression model is used to capture the unobserved heterogeneity between clusters (PSUs) along with revealing important factors. Results reveal that non-farm income has a significant positive effect on household’s consumption expenditures and non-farm income recipient households spend about 29% more than their counterparts. In addition, higher level of per capita income, education, smaller family size and lower dependency ratio are found to be more effective in increasing consumption expenditures of rural households. Significant cluster-level variations are observed in the analyses. This study recommends that non-farm income generating activities should be encouraged among rural households as this would raise their consumption expenditures and hence, improve welfare and living standards among them.

     

Social Affiliation and the Demand for Health Services: Caste and Child Health in South India

This paper assesses the role of social affiliation, measured by caste, in shaping investments in child health. The special setting that we have chosen for the analysis - tea estates in the South Indian High Range - allows us to control nonparametrically for differences in income, access to health services, and patterns of morbidity across low caste and high caste households. In this controlled setting, low caste households spend more on their children's health than high caste households, reversing the pattern we would expect to find elsewhere in India. Moreover, health expenditures do not vary by gender within either caste group, in contrast once again with the male preference documented throughout the country. A simple explanation, based on differences in the returns to human capital across castes in the tea estates is proposed to explain these striking results.     

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.     

Household Use of Agricultural Chemicals for Soil-Pest Management and Own Labor for Yard Work

In spite of its potential health and environmental risks and contribution to agribusiness, the use of agricultural chemicals for yard care has not been well studied. In our discrete-continuous choice model, estimated with data from a national survey, a household chooses how much money, if any, to initially spend on types of agricultural chemicals and applicators and how much time to subsequently spend on other yard work. Households in big cities or with large gardens are more likely to use organic chemicals. The probability that a household chooses a mix of do-it-yourself and hired applications of synthetic chemicals increases with income, age, and the presence of preschoolers. Among households that apply only synthetic chemicals without hired help, those with young children, with higher incomes, in big cities, and with male heads spend more on the chemicals. The time that such households spend on other yard work increases with expenditures on the chemicals. Cancellation of a pesticide registration might create an extra private cost for households with young children even though the ban might reduce external costs.     

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.     

Household response to dynamic pricing of electricity: a survey of 15 experiments

Since the energy crisis of 2000–2001 in the western United States, much attention has been given to boosting demand response in electricity markets. One of the best ways to let that happen is to pass through wholesale energy costs to retail customers. This can be accomplished by letting retail prices vary dynamically, either entirely or partly. For the overwhelming majority of customers, that requires a change out of the metering infrastructure, which may cost as much as $40 billion for the US as a whole. While a good portion of this investment can be covered by savings in distribution system costs, about 40% may remain uncovered. This investment gap could be covered by reductions in power generation costs that could be brought about through demand response. Thus, state regulators in many states are investigating whether customers will respond to the higher prices by lowering demand and if so, by how much. To help inform this assessment, this paper surveys the evidence from the 15 most recent pilots, experiments and full-scale implementations of dynamic pricing of electricity. It finds conclusive evidence that households respond to higher prices by lowering usage. The magnitude of price response depends on several factors, such as the magnitude of the price increase, the presence of central air conditioning and the availability of enabling technologies such as two-way programmable communicating thermostats and always-on gateway systems that allow multiple end-uses to be controlled remotely. In addition, the design of the studies, the tools used to analyze the data and the geography of the assessment influence demand response. Across the range of experiments studied, time-of-use rates induce a drop in peak demand that ranges between 3 and 6% and critical-peak pricing (CPP) tariffs induce a drop in peak demand that ranges between 13 and 20%. When accompanied with enabling technologies, the latter set of tariffs lead to a reduction in peak demand in the 27–44% range.     

Conspicuous consumption and “race”: Evidence from South Africa

A century ago, Thorstein Veblen introduced socially contingent consumption into the economic literature. This paper complements the scarce empirical literature by testing his conjecture on South African household data and finds that Black and Coloured households spend relatively more on visible consumption than comparable White households. Following the approach of Charles et al. (2009), this paper explores whether the differences in visible expenditures can be explained with a signaling model of status seeking. Moreover, it is assessed to which extent positional concerns motivate conspicuous consumption. Although the socially contingent share in visible consumption increases with income, different incentives to consume conspicuously seem to explain that, at every level of income, Black households spend relatively more on visible consumption than comparable White households. In contrast to the findings of Charles et al. (2009) where differential spending on conspicuous consumption can be found also within each group separately, the model's core hypothesis fails to hold within the group of White South Africans.