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Modelling the Energy Demand of Households in a Combined Top Down/Bottom Up Approach

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Author Info
Kurt Kratena (WIFO)
Ina Meyer (WIFO)
Michael Wüger (WIFO)

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Abstract

This paper deals with integrating elements of a bottom-up model of energy demand into a top-down model of total private consumption. The bottom-up elements are represented by the energy efficiency embodied in household appliances. The top-down model describes demand for energy and non-energy commodities in an AIDS demand system. In this model households do not directly demand energy, but energy services (hours of washing, miles of driving). These services are measured via the service price defined as the relationship between the energy price and energy efficiency. Therefore an increase in energy efficiency leads to a decrease in the service price and, thereby, increases demand for services which compensates for parts of the energy savings due to efficiency improvements ("rebound effect"). The model presented can be used to derive different feedbacks (rebound effects) from efficiency changes on energy demand and to quantify the role of efficiency improvements in reducing energy demand and emissions from households.

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Publisher Info
Paper provided by WIFO in its series WIFO Working Papers with number 321.

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Length: 26 pages
Date of creation: 21 May 2008
Date of revision:
Handle: RePEc:wfo:wpaper:y:2008:i:321

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Related research
Keywords: household energy demand; rebound effects; efficiency of appliances;

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References listed on IDEAS
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  1. Larsen, Bodil Merethe & Nesbakken, Runa, 2004. "Household electricity end-use consumption: results from econometric and engineering models," Energy Economics, Elsevier, vol. 26(2), pages 179-200, March. [Downloadable!] (restricted)
  2. Hondroyiannis, George, 2004. "Estimating residential demand for electricity in Greece," Energy Economics, Elsevier, vol. 26(3), pages 319-334, May. [Downloadable!] (restricted)
  3. Sue Wing, Ian, 2006. "Representing induced technological change in models for climate policy analysis," Energy Economics, Elsevier, vol. 28(5-6), pages 539-562, November. [Downloadable!] (restricted)
  4. Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2005. "A Residential Energy Demand System for Spain," Working Papers 0501, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research. [Downloadable!]
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  5. Holtedahl, Pernille & Joutz, Frederick L., 2004. "Residential electricity demand in Taiwan," Energy Economics, Elsevier, vol. 26(2), pages 201-224, March. [Downloadable!] (restricted)
  6. Brännlund, Runar & Ghalwash, Tarek & Nordström, Jonas, 2004. "Increased Energy Efficiency and the Rebound Effect: Effects on consumption and emissions," UmeÃ¥ Economic Studies 642, Umeå University, Department of Economics. [Downloadable!]
  7. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June. [Downloadable!] (restricted)
  8. Berkhout, Peter H. G. & Muskens, Jos C. & W. Velthuijsen, Jan, 2000. "Defining the rebound effect," Energy Policy, Elsevier, vol. 28(6-7), pages 425-432, June. [Downloadable!] (restricted)
  9. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999. "The Induced Innovation Hypothesis And Energy-Saving Technological Change," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 941-975, August. [Downloadable!] (restricted)
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  10. Willett, Keith D. & Naghshpour, Shahdad, 1987. "Residential demand for energy commodities : A household production function approach," Energy Economics, Elsevier, vol. 9(4), pages 251-256, October. [Downloadable!] (restricted)
  11. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, International Association for Energy Economics, vol. 1(4), pages 21-40.
  12. J. Daniel Khazzoom, 1989. "Energy Savings from More Efficient Appliances: A Rejoinder," The Energy Journal, International Association for Energy Economics, vol. 10(1), pages 157-166.
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