Estimating the long-term effects of utility energy conservation programs: A Pacific Northwest example

The Bonneville Power Administration operated a Residential Weatherization Pilot Program from 1980 through 1982. The program provided free home energy audits to 7200 electrically heated homes in the Pacific Northwest and gave zero-interest loans to weatherize 4100 of these homes. The total cost of the program was almost $11 million.The pilot program and its regionwide successor are intended to provide benefits to the Pacific Northwest region for roughly 30 years in terms of reduced residential energy consumption. Therefore, it is important to determine the durability of the electricity savings due to the program. Estimates of long-term savings affect power supply planning in the region and influence the economics of the program itself (i.e., the level of funding that BPA can justify for the program).This article presents empirical results concerning the total and net energy-saving affects of the BPA pilot program 1, 2, and 3 years after participation. The total annual electricity saving experienced by households that received an energy audit and a weatherization loan averaged 5300 kWh 1 year after participation, increasing to 6000 and 6500 kWh 2 and 3 years after participation, respectively. The net annual electricity saving that can be directly attributed to the program for these audit plus loan households averaged 4500 kWh (15% of preprogram use) 1 year after participation and declined slightly to about 4300 kWh 2 years and 4200 kWh 3 years after participation.The article uses these empirical findings with a simple simulation model to estimate the effects of the program into the future. Assuming that electricity prices remain constant after 1984, total energy savings increase to a level of 7000 kWh, while net energy savings decrease to 3600 kWh for the audit plus loan households. Alternative electricity price scenarios are discussed.     

Heterogeneity in the Effect of Home Energy Audits: Theory and Evidence

A longstanding question in the study of energy demand concerns the role of information as a determinant of home efficiency improvements. Although the provision of information via energy audits is frequently asserted to be an effective means for governments to encourage the implementation of efficiency-enhancing renovations, empirical support for this assertion is tenuous at best. Apart from endogeneity issues with respect to receiving an audit, two other factors have complicated attempts to measure their effect: First, the nature of the information provided by the audit is typically unobserved, and, second, the response to this information may vary over households. Using household data from Germany, we address both sources of heterogeneity by estimating a random-parameter model of four retrofitting alternatives. In addition to confirming the importance of costs and savings as determinants of renovation choices, our results suggest that the effects of consultancy vary substantially across households, with some households responding negatively to the provision of information.     

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.     

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.     

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.     

Is the household demand for in-home services sensitive to tax reductions? The French case

Our paper examines the impact of tax reductions on the demand for services in the home. For that purpose, we estimate a structural model of demand for such services by using household individual data collected by INSEE (Paris) in 1996. In this model, the net hourly wage paid to the domestic employee, the household preferences for consumption of in-home services and the decision to take advantage of the tax reduction are considered as endogenous variables. Estimation of the econometric model uses the fact that some households are observed to consume domestic services and to take advantage of the tax reduction, while others either consume such services but do not take advantage of the tax reduction, or do not consume these services at all. Its identification relies on an exclusion restriction resulting from the tax credit schedule. Results show that the probability of consuming in-home services increases with age and income. A 10% increase in the tax reduction would increase from 45.9 to 50.8% the proportion of households benefiting from the tax reduction among those who consume paid in-home services. Moreover, 13.5% of households who do not actually consume such services would do so after the 10% increase in the tax reduction. These simulated variations would mainly concern high-income households.     

Time-saving innovations, time allocation, and energy use: Evidence from Canadian households

Time and energy are major inputs into the production of household goods and services. As a result, the market penetration of time-saving technologies for general household use is expected to affect both a household's (i) allocation of time across home production and leisure activities; and (ii) energy use. For example, with a household's adoption of a microwave or a dishwasher, cooking food and washing dishes will require less time, and therefore in-home meal preparation may increase. Households with microwaves or dishwashers may also opt to spend more time undertaking other production activities, inside or outside the home, or engage in more leisure (watching TV, reading, exercising). To the extent that time is reallocated from less to more energy-intensive activities in the home, residential energy use will increase as households adopt appliances that embody time-saving technology. Furthermore, an adoption of time-saving technologies for basic household chores, such as meal preparation and laundry, can impact energy use due to the fact that many time-saving technologies are more energy intensive than alternative technologies that require larger time commitments. In this paper, we use the Canadian Survey of Household Energy Use data from 2003 to examine the extent to which ownership of products that embody time-saving innovations affects time allocation and energy use at the household level.     

Do small pecuniary incentives motivate residential peak energy reductions? Experimental evidence

This article evaluates demand-side interventions aimed at reducing residential consumption during the peak energy periods. The interventions were applied to a sample of high-income households and included a set of text message reminders advising participants to reduce electricity use during peak hours. One group of participants received accompanying intra-day increases in peak-hour kWh rates, while another group of participants did not receive any price incentives. We find that intra-day price increases, though small in absolute magnitude, produced significant reductions in peak energy use. Reductions in use, as compared to a control group, were significantly higher among the pricing group compared to the group only receiving text messages, suggesting that pricing played a central role in influencing behaviour. Our results contribute to ongoing policy discussion about the effect of dynamic pricing on consumer energy demand.     

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.     

Does homeownership promote wealth accumulation?

It is well known that homeowners are richer than renters, even after controlling for observable household characteristics. This is often used as an argument for policies that foster homeownership. However, the causal link between homeownership and wealth is difficult to establish due to many potential sources of endogeneity. Utilizing the Household Finance and Consumption Survey for the Euro area, we correct for endogeneity by using inheriting the household’ s main residence as an instrument. The exclusion restriction is that conditional on the total amount of inheritance, inheriting a home affects the wealth position of the household only through homeownership. For the sample of inheritors we find that the local average treatment effect for households that inherit a home and stay homeowners is negative. Owning a home reduces riches due to sizable reductions in the net holdings of financial and other real wealth of the treated households.     

Individualism and the adoption of clean energy technology

Why do 20% of Swedes report having adopted a clean energy system while the corresponding share of Spaniards equals 0.4%? Using data for about 25,000 individuals across 33 countries, this study tests which cultural trait, individualism or collectivism, is associated with greater levels of clean technology adoption. Our fractional probit estimates suggest that individualistic individuals are more inclined to adopt clean energy systems for home and transport purposes. In particular, the adoption probability rises by an estimated 2% if a person exhibits individualistic values. This finding is not driven by country-specific tax or subsidy policies or market-specific determinants and is robust to controlling for individual and household characteristics, attitudes, social and personal norms and other significant dimensions of cultural differences. The results, therefore, facilitate an understanding of how the decision to adopt clean energy technologies can be driven by cultural factors.     

Community-based incentives for environmental protection: the case of green electricity

This paper examines the effectiveness of using community-level rewards to subsidize environmental protection. Specifically, we study the Connecticut Clean Energy Communities (CCEC) program that provides mostly symbolic rewards in the form of municipal photovoltaic installations in proportion to the number of households that voluntarily purchase green electricity. We find that the program causes a 22 % increase in the number of households purchasing green electricity in CCEC municipalities. The pattern of results suggests that the CCEC leads to the mobilization of community-based recruitment campaigns that increase signup rates by up to 700 % around the period of initial qualification. We also find that a change in the marginal incentive created by the program has little consequence on signup behavior. The implication for policy is that community-based incentives can be effective, but the size of the subsidy itself appears less important. Finally, simple calculations based on CCEC up-front costs reveal upper-bound, cost-effectiveness measures of $570 per household signup, 6.7 $\not {c} $ per kilowatt-hour of annual green-electricity demand, and $113 per ton of annual carbon-dioxide emission reductions.     

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.     

Coverage area expansion, customer switching, and household profiles in the Japanese broadband access market

This paper examines the diffusion process of Internet broadband access in Japan by modeling the household choice of access modes. Estimates reveal that the characteristics of users, rather than those of the access modes, play a significant role in demand substitution across the modes. Simulation exercises indicate that had optic fibers (fiber-to-the-home; FTTH) been made available to the whole country in 2005, only 10% of households would have switched to that mode. This result implies that once chosen, the household choice of access mode persists, and that indirect network effects are an important element in decisions to adopt the new technology of broadband. Finally, policy implications are discussed.     

Testing exact aggregation in income and household characteristics: the effects of aggregation across goods

Exact aggregation in income and household characteristics are tested using Canadian cross-sectional microdata. Over 100 data sets of homogeneous households are used, making it possible to conduct a large number of independent hypothesis tests. Tests are also conducted to determine whether the homogeneous household groups can be grouped into more heterogeneous data sets. Six different kinds of demand systems are estimated to ensure the robustness of the results to separability/aggregation structure.Exact aggregation in income, family size, region of residence and housing tenure status are strongly rejected, but exact aggregation in age of head of household is not. Restrictions which would allow pooling of households of different sizes, regions and tenure status are also strongly rejected. The test results exhibit a little sensitivity to the expenditure aggregates used, but not to the extent that the results would be different.The results imply that aggregate demand functions which use time series data should include many statistics from the joint distribution of income and household characteristics. In addition, when using data at the micro-level, the amount of heterogeneity in households' behaviour is much greater than usually assumed. This calls for the use of much more homogeneous household groups in the estimation of demand models than are typically employed.     

Residential energy use and conservation: Economics and demographics

Energy consumption in the residential sector offers an important opportunity for conserving resources. However, much of the current debate regarding energy efficiency in the housing market focuses on the physical and technical determinants of energy consumption, neglecting the role of the economic behavior of resident households. In this paper, we analyze the extent to which the use of gas and electricity is determined by the technical specifications of the dwelling as compared to the demographic characteristics of the residents. Our analysis is based on a sample of more than 300,000 Dutch homes and their occupants. The results indicate that residential gas consumption is determined principally by structural dwelling characteristics, such as the vintage, building type, and characteristics of the dwelling, while electricity consumption varies more directly with household composition, in particular income and family composition. Combining these results with projections on future economic and demographic trends, we find that, even absent price increases for residential energy, the aging of the population and their increasing wealth will roughly offset improvements in the energy efficiency of the building stock resulting from policy interventions and natural revitalization.     

Household Response to Optional Peak-Load Pricing of Electricity

I investigate the impacts of voluntary time-of-day (TOD) rates on residential demand for electricity. My analysis is based on a sample of a survey, which provides cross-sectional data on electricity consumption and economic/demographic features for both TOD and non-TOD households in Japan. This information is used to develop an almost ideal demand system for the TOD electricity consumption during the summer. The results show that (1) household response to the high price of the peak period is relatively modest, and (2) the relative magnitudes of the price and selection effects depend on the ownership of water heaters.     

家庭异质性视角下城乡居民家庭碳排放研究——以陕西为例

为把握城乡居民各种口径碳排放的变动趋势,借鉴IPCC推荐方法及投入产出分析方法,分别测算2005—2017年陕西省居民家庭各种口径的碳排放量,发现陕西城镇家庭各口径碳排放量均高于农村家庭;为分析引起城乡居民家庭直接和间接碳排放总量变动的深层原因,借鉴对数平均迪氏指数分解(LMDI)模型,发现家庭人均收入、家庭户数效应、家庭规模效应、能源消费结构、能源消费强度、家庭消费率、家庭消费结构等表征家庭异质性的变量对城乡家庭直接及间接碳排放总量有不同程度的正向驱动或负向驱动效应,并根据研究结论对地方政府控制家庭碳排放量提出政策建议。     

Zur Energienachfrage privater Haushalte

Summary This paper analyzes the private demand for energy (coal, heating oil, natural gas and electricity) for the period 1958–1974, using yearly data.The energy demand of private households is supposed to be dependent on household incomes, prices of the respective energy sources and yearly temperature levels. The special aim of this paper is to get hold of the influence of the relative prices of the 11 sub-groups of private consumption. The impact of these relativ prices is analyzed through the method of principal components, where upon the first three principal components are introduced as additional independent variables into the regression.Although the principal components do not have any interpretation beyond that of an index, the fit of the estimated demand questions has been improved and the elasticities are more close to the expected values.     

SAVING ENERGY THROUGH BETTER INFORMATION: A NEW ENERGY PARADIGM?

For the past 40 years, governments, utilities, and private companies have developed increasingly efficient appliances for household use and governments have initiated policies to encourage the deployment of these technologies. To the credit of these activities, we have improved the efficiency of electricity use in the United States, but it has not been enough to overcome the increasing demand from proliferation of electricity‐using devices. In addition, penetration rates for some types of efficient equipment have remained relatively low in certain regions. U.S. electricity demand thus continues to grow. In this paper, we argue that to achieve significantly greater efficiency improvements needed to meet future demand for energy services, we should provide more information to consumers about their energy use and give them more control over this use. While more studies are needed to assess just how far these types of measures can take us, there is enough evidence to show that with better information, consumers often make choices that reduce energy use.