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Why Has California’s Residential Electricity Consumption Been So Flat since the 1980s?: A Microeconometric Approach

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  • Dora L. Costa
  • Matthew E. Kahn

Abstract

We use detailed microeconomic data to investigate why aggregate residential electricity consumption in California has been flat since 1980. Using unique micro data, we document the role that household demographics and ideology play in determining electricity demand. We show that building codes have been effective for homes built after 1983. We find that houses built in the 1970s and early 1980s were energy inefficient relative to houses built before 1960 because the price of electricity at the time of construction was low. Employing our regression estimates, we construct an aggregate residential electricity consumption time series index from 1980 to 2006. We show that certain micro determinants of household electricity consumption such as the phase in of building codes explain California’s flat consumption while other factors (such as rising incomes and increased new home sizes) go in the opposite direction. Because homes are long-lived durables, we have not yet seen the full impact of building codes on California’s electricity consumption.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15978.

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Date of creation: May 2010
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Handle: RePEc:nbr:nberwo:15978

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References

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  1. Mansur, Erin T. & Mendelsohn, Robert & Morrison, Wendy, 2008. "Climate change adaptation: A study of fuel choice and consumption in the US energy sector," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 175-193, March.
  2. Kahn, Matthew E., 2007. "Do greens drive Hummers or hybrids? Environmental ideology as a determinant of consumer choice," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 129-145, September.
  3. Peter C. Reiss & Matthew W. White, 2008. "What changes energy consumption? Prices and public pressures," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 636-663.
  4. Lucas W. Davis, 2008. "Durable goods and residential demand for energy and water: evidence from a field trial," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 530-546.
  5. Matthew J. Kotchen & Michael R. Moore, 2004. "Private Provision of Environmental Public Goods: Household Participation in Green-Electricity Programs," Department of Economics Working Papers 2004-07, Department of Economics, Williams College.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Big Think on the Future of Energy Economics
    by Matthew E. Kahn in Environmental and Urban Economics on 2012-02-17 17:59:00
  2. The Age of Big Data and the Rising Demand for Applied Micro Economists
    by Matthew E. Kahn in Environmental and Urban Economics on 2012-02-12 21:36:00
  3. Do Liberal Cities Block New Housing Development?
    by Matthew E. Kahn in Environmental and Urban Economics on 2010-11-25 01:53:00
  4. The Causes and Consequences of Environmentalism
    by Matthew E. Kahn in Environmental and Urban Economics on 2010-08-25 01:03:00
  5. Republicans and Environmentalism
    by Matthew E. Kahn in Environmental and Urban Economics on 2012-06-03 19:48:00
  6. Conservatives and Conservation
    by Matthew E. Kahn in Environmental and Urban Economics on 2012-06-11 15:48:00
  7. Do Environmentalists Own Swimming Pools?
    by Matthew Kahn in Environmental and Urban Economics on 2012-07-30 21:44:00
  8. Some Economics of the Green Partisan Divide
    by Matthew E. Kahn in Legal Planet on 2012-09-03 15:55:52
  9. 1043 Economics Journals to Choose From
    by Matthew Kahn in Environmental and Urban Economics on 2012-09-17 02:34:00
  10. New Real Estate Research by Kahn, Kok and Quigley
    by Matthew Kahn in Environmental and Urban Economics on 2013-01-12 18:24:00
  11. Energy Use in New Commercial Buildings: Rebound Effect?
    by Matthew Kahn in Urbanization Project on 2013-01-14 21:10:06
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Cited by:
  1. Arik Levinson, 2013. "California Energy Efficiency: Lessons for the Rest of the World, or Not?," NBER Working Papers 19123, National Bureau of Economic Research, Inc.
  2. Dastrup, Samuel R. & Graff Zivin, Joshua & Costa, Dora L. & Kahn, Matthew E., 2012. "Understanding the Solar Home price premium: Electricity generation and “Green” social status," European Economic Review, Elsevier, vol. 56(5), pages 961-973.
  3. Sudarshan, Anant, 2013. "Deconstructing the Rosenfeld curve: Making sense of California's low electricity intensity," Energy Economics, Elsevier, vol. 39(C), pages 197-207.
  4. Xavier Labandeira & Ana Ramos, 2012. "Household Environmental Attitudes and Energy Efficiency in Buildings: Evidence from Spanish Data," Working Papers fa08-2012, Economics for Energy.
  5. Dora L. Costa & Matthew E. Kahn, 2011. "Electricity Consumption and Durable Housing: Understanding Cohort Effects," NBER Working Papers 16732, National Bureau of Economic Research, Inc.

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