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The role of individual preferences in explaining the energy performance gap

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  • Bakaloglou, Salomé
  • Charlier, Dorothée

Abstract

The aim of this research is to understand the role of socioeconomic characteristics and individual preferences in explaining the energy performance gap in the residential sector. This gap reflects the difference between the theoretical energy consumption of homes assessed by engineering models and real energy consumption. Using the ratio of the two consumption amounts to measure the gap, we perform a quantile regression to tease out the effects of preferences on the entire distribution of the energy performance gap spectrum instead of focusing on the conditional average. As a result, this research provides an original contribution: depending on the direction of the gap, our findings suggest that significant drivers include individual preferences for comfort over economy, which explain up to 12% of the gap variability, and poverty. This context should serve as a reminder to public authorities regarding the issues of rebound effect and household welfare.

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  • Bakaloglou, Salomé & Charlier, Dorothée, 2021. "The role of individual preferences in explaining the energy performance gap," Energy Economics, Elsevier, vol. 104(C).
    • Handle: RePEc:eee:eneeco:v:104:y:2021:i:c:s0140988321004771
    DOI: 10.1016/j.eneco.2021.105611
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    2. Morgan, J. & Chu, C.M. & Haines-Doran, T., 2023. "Competent retrofitting policy and inflation resilience: The cheapest energy is that which you don't use," Energy Economics, Elsevier, vol. 121(C).
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    More about this item

    Keywords

    Residential energy consumption; Household preferences; Energy performance gap; Quantile regression; Quantile treatment effect;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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