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Determinants of residential space heating expenditures in Great Britain

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  • Meier, Helena
  • Rehdanz, Katrin

Abstract

In Great Britain, several policy measures have been implemented in order to increase energy efficiency and reduce carbon emissions. In the domestic sector, this could, for example, be achieved by improving space heating efficiency and thus decreasing heating expenditure. However, in order to efficiently design and implement such policy measures, a better understanding of the determinants affecting heating expenditure is needed. In this paper we examine the following determinants: socio-economic factors, building characteristics, heating technologies and weather conditions. In contrast to most other studies we use panel data to investigate household demand for heating in Great Britain. Our data sample is the result of an annual set of interviews with more than 5000 households, starting in 1991 and ending in 2005. The sample represents a total of 64,000 observations over the fifteen-year period. Our aim is to derive price and income elasticities both for Britain as a whole and for different types of household. Our results suggest that differences exist between owner-occupied and renter households. These households react differently to changes in income and prices. Our results also imply that a number of socio-economic criteria have a significant influence on heating expenditure, independently of the fuel used for heating. Understanding the impacts of different factors on heating expenditure and impact differences between types of household is helpful in designing target-oriented policy measures.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 32 (2010)
Issue (Month): 5 (September)
Pages: 949-959

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Handle: RePEc:eee:eneeco:v:32:y:2010:i:5:p:949-959

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Web page: http://www.elsevier.com/locate/eneco

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Keywords: Great Britain Space heating Income elasticity Price elasticity;

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  1. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
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  3. van den Bergh, Jeroen C.J.M., 2008. "Environmental regulation of households: An empirical review of economic and psychological factors," Ecological Economics, Elsevier, vol. 66(4), pages 559-574, July.
  4. Nesbakken, Runa, 2001. " Energy Consumption for Space Heating: A Discrete-Continuous Approach," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(1), pages 165-84, March.
  5. Leth-Petersen, Soren & Togeby, Mikael, 2001. "Demand for space heating in apartment blocks: measuring effects of policy measures aiming at reducing energy consumption," Energy Economics, Elsevier, vol. 23(4), pages 387-403, July.
  6. Rehdanz, Katrin, 2007. "Determinants of residential space heating expenditures in Germany," Energy Economics, Elsevier, vol. 29(2), pages 167-182, March.
  7. Laura Blow, 2004. "Household Expenditures Patterns in the UK," DEMPATEM Working Papers wp2, AIAS, Amsterdam Institute for Advanced Labour Studies.
  8. Druckman, A. & Jackson, T., 2008. "Household energy consumption in the UK: A highly geographically and socio-economically disaggregated model," Energy Policy, Elsevier, vol. 36(8), pages 3167-3182, August.
  9. Simon Dresner & Paul Ekins, 2006. "Economic instruments to improve UK home energy efficiency without negative social impacts," Fiscal Studies, Institute for Fiscal Studies, vol. 27(1), pages 47-74, March.
  10. Nesbakken, Runa, 1999. "Price sensitivity of residential energy consumption in Norway," Energy Economics, Elsevier, vol. 21(6), pages 493-515, December.
  11. Baker, Paul & Blundell, Richard & Micklewright, John, 1989. "Modelling Household Energy Expenditures Using Micro-data," Economic Journal, Royal Economic Society, vol. 99(397), pages 720-38, September.
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Citations

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Cited by:
  1. Brutscher, P-B., 2012. "Making Sense of Oil Stamp Saving Schemes," Cambridge Working Papers in Economics 1203, Faculty of Economics, University of Cambridge.
  2. Peter Heindl, 2014. "Measuring Fuel Poverty: General Considerations and Application to German Household Data," SOEPpapers on Multidisciplinary Panel Data Research 632, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Anna Alberini & Will Gans & Daniel Velez-Lopez, 2011. "Residential Consumption of Gas and Electricity in the U.S.: The Role of Prices and Income," Working Papers 2011.01, Fondazione Eni Enrico Mattei.
  4. Brounen, Dirk & Kok, Nils & Quigley, John M., 2012. "Residential energy use and conservation: Economics and demographics," European Economic Review, Elsevier, vol. 56(5), pages 931-945.
  5. Dieckhoener, Caroline, 2012. "Does subsidizing investments in energy efficiency reduce energy consumption? Evidence from Germany," EWI Working Papers 2012-17, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
  6. Laura Traynor & Ian A. Lange & Mirko Moro, 2012. "Green Hypocrisy?: Environmental Attitudes and Residential Space Heating Expenditure," CESifo Working Paper Series 3852, CESifo Group Munich.
  7. Arie ten Cate, 2012. "The socially optimal energy transition in a residential neighbourhood in the Netherlands," CPB Discussion Paper 222, CPB Netherlands Bureau for Economic Policy Analysis.
  8. Büchs, Milena & Schnepf, Sylke V., 2013. "Who emits most? Associations between socio-economic factors and UK households' home energy, transport, indirect and total CO2 emissions," Ecological Economics, Elsevier, vol. 90(C), pages 114-123.

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