IDEAS home Printed from https://ideas.repec.org/a/spr/gjorer/v6y2020i1d10.1365_s41056-019-00027-y.html
   My bibliography  Save this article

Determinants of energy consumption and exposure to energy price risk: a UK study
[Determinanten des Energieverbrauchs und Energiepreisrisiko: Eine Studie aus Großbritannien]

Author

Listed:
  • Franz Fuerst

    (University of Cambridge)

  • Dimitra Kavarnou

    (University of Cambridge)

  • Ramandeep Singh

    (University of Cambridge)

  • Hassan Adan

    (University of Cambridge)

Abstract

In this study, we examine the drivers of household energy consumption with a view towards gauging which households are particularly vulnerable to energy price risk. We specifically investigate the relative importance of household socio-economic characteristics versus dwelling characteristics in explaining per capita gas consumption for space heating. The study draws upon a large random sample of households from the English Housing Survey (EHS) to understand the importance of, and interaction between, household and building characteristics. A multivariate OLS regression is used to identify the relative effects of various consumption drivers on gas used for space heating. The use of standardised coefficients allows for a discussion of the marginal contributions of each factor to energy consumption. The results show that variation in gas usage is largely determined by household socio-economic characteristics rather than physical dwelling characteristics. This includes the significant influence of household characteristics such as composition (or type), size, employment status, and income. The main contribution of the study is to underline the relative importance of household socio-economic characteristics over dwelling characteristics in explaining per capita energy consumption. The reported findings challenge the prevailing policy practice, which focusses mostly on dwelling characteristics.

Suggested Citation

  • Franz Fuerst & Dimitra Kavarnou & Ramandeep Singh & Hassan Adan, 2020. "Determinants of energy consumption and exposure to energy price risk: a UK study [Determinanten des Energieverbrauchs und Energiepreisrisiko: Eine Studie aus Großbritannien]," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 6(1), pages 65-80, April.
    • Handle: RePEc:spr:gjorer:v:6:y:2020:i:1:d:10.1365_s41056-019-00027-y
    DOI: 10.1365/s41056-019-00027-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1365/s41056-019-00027-y
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1365/s41056-019-00027-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. ARTHUR Rosenfeld & CELINA Atkinson & JONATHAN Koomey & ALAN Meier & ROBERT J. Mowris & LYNN PRICE, 1993. "Conserved Energy Supply Curves For U.S. Buildings," Contemporary Economic Policy, Western Economic Association International, vol. 11(1), pages 45-68, January.
    2. Meier, Helena & Rehdanz, Katrin, 2010. "Determinants of residential space heating expenditures in Great Britain," Energy Economics, Elsevier, vol. 32(5), pages 949-959, September.
    3. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
    4. Yohanis, Yigzaw Goshu, 2012. "Domestic energy use and householders' energy behaviour," Energy Policy, Elsevier, vol. 41(C), pages 654-665.
    5. Rehdanz, Katrin, 2007. "Determinants of residential space heating expenditures in Germany," Energy Economics, Elsevier, vol. 29(2), pages 167-182, March.
    6. Alberini, Anna & Gans, Will & Velez-Lopez, Daniel, 2011. "Residential consumption of gas and electricity in the U.S.: The role of prices and income," Energy Economics, Elsevier, vol. 33(5), pages 870-881, September.
    7. Blumstein, Carl & Stoft, Steven E, 1995. "Technical efficiency, production functions and conservation supply curves," Energy Policy, Elsevier, vol. 23(9), pages 765-768, September.
    8. Huebner, Gesche M. & Hamilton, Ian & Chalabi, Zaid & Shipworth, David & Oreszczyn, Tadj, 2015. "Explaining domestic energy consumption – The comparative contribution of building factors, socio-demographics, behaviours and attitudes," Applied Energy, Elsevier, vol. 159(C), pages 589-600.
    9. Jason F. Shogren & Laura O. Taylor, 2008. "On Behavioral-Environmental Economics," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(1), pages 26-44, Winter.
    10. Baker, Paul & Blundell, Richard & Micklewright, John, 1989. "Modelling Household Energy Expenditures Using Micro-data," Economic Journal, Royal Economic Society, vol. 99(397), pages 720-738, September.
    11. Wyatt, Peter, 2013. "A dwelling-level investigation into the physical and socio-economic drivers of domestic energy consumption in England," Energy Policy, Elsevier, vol. 60(C), pages 540-549.
    12. Erdal Aydin & Nils Kok & Dirk Brounen, 2017. "Energy efficiency and household behavior: the rebound effect in the residential sector," RAND Journal of Economics, RAND Corporation, vol. 48(3), pages 749-782, August.
    13. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
    14. Alberini, Anna & Gans, Will & Velez-Lopez, Daniel, 2011. "Residential Consumption of Gas and Electricity in the U.S.: The Role of Prices and Income," Sustainable Development Papers 99637, Fondazione Eni Enrico Mattei (FEEM).
    15. 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.
    16. 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.
    17. Moore, Richard, 2012. "Definitions of fuel poverty: Implications for policy," Energy Policy, Elsevier, vol. 49(C), pages 19-26.
    18. Estiri, Hossein, 2014. "Building and household X-factors and energy consumption at the residential sector," Energy Economics, Elsevier, vol. 43(C), pages 178-184.
    19. Sorrell, Steve & Dimitropoulos, John & Sommerville, Matt, 2009. "Empirical estimates of the direct rebound effect: A review," Energy Policy, Elsevier, vol. 37(4), pages 1356-1371, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Małgorzata Sztorc, 2022. "The Implementation of the European Green Deal Strategy as a Challenge for Energy Management in the Face of the COVID-19 Pandemic," Energies, MDPI, vol. 15(7), pages 1-21, April.
    2. Carfora, Alfonso & Scandurra, Giuseppe & Thomas, Antonio, 2022. "Forecasting the COVID-19 effects on energy poverty across EU member states," Energy Policy, Elsevier, vol. 161(C).
    3. Horace Koranteng Nkansah & Shafic Suleman & Ishmael Ackah & Benjamin Ashitey Amarh & Dominic Eduah & John Abdulai Jinapor, 2022. "Determinants of Electricity Demand in Cote D’Ivoire, Ghana, Nigeria and Senegal," Energies, MDPI, vol. 15(14), pages 1-18, July.
    4. Novani Karina Saputri & Lourentius Dimas Setyonugroho & Djoni Hartono, 2024. "Exploring the determinants of energy poverty in Indonesia’s households: empirical evidence from the 2015–2019 SUSENAS," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    5. Viktorija Bobinaite & Inga Konstantinaviciute & Arvydas Galinis & Mária Bartek-Lesi & Viktor Rácz & Bettina Dézsi, 2022. "Energy Sufficiency in the Household Sector of Lithuania and Hungary: The Case of Heated Floor Area," Sustainability, MDPI, vol. 14(23), pages 1-19, December.
    6. Wang, Lan & Lee, Eric W.M. & Hussian, Syed Asad & Yuen, Anthony Chun Yin & Feng, Wei, 2021. "Quantitative impact analysis of driving factors on annual residential building energy end-use combining machine learning and stochastic methods," Applied Energy, Elsevier, vol. 299(C).
    7. Simonovits, András & Kotek, Péter & Horváth, Gábor & Takácsné Tóth, Borbála, 2023. "Az energiaárak támogatása Magyarországon - egy egyszerű modell [Subsidizing energy prices in Hungary - a simple model]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 589-612.
    8. Kunofiwa Tsaurai, 2021. "Macroeconomic Determinants of Energy Consumption in BRICS (Brazil, Russia, India, China, South Africa)," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 405-423.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Salomé Bakaloglou and Dorothée Charlier, 2019. "Energy Consumption in the French Residential Sector: How Much do Individual Preferences Matter?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    2. Hache, Emmanuel & Leboullenger, Déborah & Mignon, Valérie, 2017. "Beyond average energy consumption in the French residential housing market: A household classification approach," Energy Policy, Elsevier, vol. 107(C), pages 82-95.
    3. Dorothee Charlier and Sondes Kahouli, 2019. "From Residential Energy Demand to Fuel Poverty: Income-induced Non-linearities in the Reactions of Households to Energy Price Fluctuations," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    4. Anna Risch & Claire Salmon, 2017. "What matters in residential energy consumption: evidence from France," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 40(1/2), pages 79-116.
    5. Dorothée Charlier & Sondès Kahouli, 2018. "Fuel poverty and residential energy demand: how fuel-poor households react to energy price fluctuations," Post-Print halshs-01957771, HAL.
    6. Hendrik Schmitz & Reinhard Madlener, 2020. "Heterogeneity in price responsiveness for residential space heating in Germany," Empirical Economics, Springer, vol. 59(5), pages 2255-2281, November.
    7. Copiello, Sergio & Grillenzoni, Carlo, 2017. "Is the cold the only reason why we heat our homes? Empirical evidence from spatial series data," Applied Energy, Elsevier, vol. 193(C), pages 491-506.
    8. van den Brom, Paula & Hansen, Anders Rhiger & Gram-Hanssen, Kirsten & Meijer, Arjen & Visscher, Henk, 2019. "Variances in residential heating consumption – Importance of building characteristics and occupants analysed by movers and stayers," Applied Energy, Elsevier, vol. 250(C), pages 713-728.
    9. Aydin, Erdal, 2016. "Energy conservation in the residential sector : The role of policy and market forces," Other publications TiSEM b9cedba8-1310-4097-90fb-b, Tilburg University, School of Economics and Management.
    10. Nina Boogen & Souvik Datta & Massimo Filippini, 2014. "Going beyond tradition: Estimating residential electricity demand using an appliance index and energy services," CER-ETH Economics working paper series 14/200, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    11. Schulte, Isabella & Heindl, Peter, 2017. "Price and income elasticities of residential energy demand in Germany," Energy Policy, Elsevier, vol. 102(C), pages 512-528.
    12. Tilov, Ivan & Farsi, Mehdi & Volland, Benjamin, 2019. "Interactions in Swiss households’ energy demand: A holistic approach," Energy Policy, Elsevier, vol. 128(C), pages 136-149.
    13. Salari, Mahmoud & Javid, Roxana J., 2017. "Modeling household energy expenditure in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 822-832.
    14. Taneja, Shivani & Mandys, Filip, 2022. "Drivers of UK household energy expenditure: Promoting efficiency and curbing emissions," Energy Policy, Elsevier, vol. 167(C).
    15. Belaïd, Fateh & Garcia, Thomas, 2016. "Understanding the spectrum of residential energy-saving behaviours: French evidence using disaggregated data," Energy Economics, Elsevier, vol. 57(C), pages 204-214.
    16. Helena Meier, Tooraj Jamasb, and Luis Orea, 2013. "Necessity or Luxury Good? Household Energy Spending and Income in Britain 1991-2007," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    17. Caroline Dieckhöner, 2012. "Does Subsidizing Investments in Energy Efficiency Reduce Energy Consumption?: Evidence from Germany," SOEPpapers on Multidisciplinary Panel Data Research 527, DIW Berlin, The German Socio-Economic Panel (SOEP).
    18. Kostakis, Ioannis & Lolos, Sarantis & Sardianou, Eleni, 2021. "Residential natural gas demand: Assessing the evidence from Greece using pseudo-panels, 2012–2019," Energy Economics, Elsevier, vol. 99(C).
    19. Longhi, Simonetta, 2015. "Residential energy expenditures and the relevance of changes in household circumstances," Energy Economics, Elsevier, vol. 49(C), pages 440-450.
    20. Harold, Jason & Lyons, Seán & Cullinan, John, 2015. "The determinants of residential gas demand in Ireland," Energy Economics, Elsevier, vol. 51(C), pages 475-483.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:gjorer:v:6:y:2020:i:1:d:10.1365_s41056-019-00027-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.