Advanced Search
MyIDEAS: Login to save this paper or follow this series

An Intertemporal Optimisation Model of Households in an E3-Model (Economy/Energy/Environment) Framework

Contents:

Author Info

  • Kurt Kratena

    (WIFO)

  • Michael Wüger

    (WIFO)

Abstract

This paper deals with the total CO2 impact of households in a simple dynamic E3 model (economy/energy/environment), comprising a model block of private consumption and an input-output model. The consumption model describes the demand for different durables and nondurables, derived from intertemporal optimisation and has been estimated econometrically with Austrian time series data. Energy demand of households in addition to economic variables also depends on the energy-efficiency as well as the level of energy-using durables (electrical and non-electrical appliances, vehicles, video, audio, computer goods). Higher energy-efficiency also leads to the well known "rebound effect", as the "service" of energy becomes cheaper. Investment in new and potentially more energy-efficient durables is guided by intertemporal optimisation. Policies with incentives to switch towards a more energy-efficient durable stock have an impact on energy consumption, as well as on the demand for other nondurables and – due to the investment – on durables and therefore cause multiple effects on energy demand and emissions. Indirect energy demand and CO2 emissions of production for households is also taken into account. An exemplary simulation of a scrappage policy scheme for private cars reveals that – though the direct "rebound effect" lies within the range found in the literature – the direct and indirect feedback mechanisms on energy demand of the total economy might be completely different.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.wifo.ac.at/wwa/pubid/40716
File Function: Abstract
Download Restriction: no

Bibliographic Info

Paper provided by WIFO in its series WIFO Working Papers with number 382.

as in new window
Length: 49 pages
Date of creation: 03 Nov 2010
Date of revision:
Handle: RePEc:wfo:wpaper:y:2010:i:382

Contact details of provider:
Postal: Arsenal Object 20, A-1030 Wien
Phone: (+43 1) 798 26 01-0
Fax: (+43 1) 798 93 86
Web page: http://www.wifo.ac.at/
More information through EDIRC

Related research

Keywords: energy demand and environmental impact; durable goods; intertemporal optimisation with liquidity constraints; input-output modelling;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Orazio P. Attanasio & Guglielmo Weber, 1994. "Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey," NBER Working Papers 4795, National Bureau of Economic Research, Inc.
  2. Klaus Conrad & Tobias Schmidt, 1998. "Economic Effects of an Uncoordinated Versus a Coordinated Carbon Dioxide Policy in the European Union: An Applied General Equilibrium Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 10(2), pages 161-182.
  3. Caballero, R.J., 1990. "Durable Goods: An Explanation For Their Slow Adjustment," Discussion Papers 1990_49, Columbia University, Department of Economics.
  4. Maria J. Luengo-Prado, 2004. "Durables, Nondurables, Down Payments and Consumption Excesses," Macroeconomics 0408006, EconWPA.
  5. Shigemi Kagawa & Yuki Kudoh & Keisuke Nansai & Tomohiro Tasaki, 2008. "The Economic and Environmental Consequences of Automobile Lifetime Extension and Fuel Economy Improvement: Japan's Case," Economic Systems Research, Taylor & Francis Journals, vol. 20(1), pages 3-28.
  6. Carroll, Christopher D, 1997. "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 1-55, February.
  7. Frank Smets & Raf Wouters, 2003. "An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1123-1175, 09.
  8. Janice C. Eberly, . "Adjustment of Consumers' Durables Stocks: Evidence from Automobile Purchases," Rodney L. White Center for Financial Research Working Papers 22-91, Wharton School Rodney L. White Center for Financial Research.
  9. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
  10. 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.
  11. Alessi, R & Michael Devereux & Guglielmo Weber, 1993. "Intertemporal consumption, durables and liquidity constraints: a cohort analysis," IFS Working Papers W93/07, Institute for Fiscal Studies.
  12. Chah, Eun Young & Ramey, Valerie A & Starr, Ross M, 1995. "Liquidity Constraints and Intertemporal Consumer Optimization: Theory and Evidence from Durable Goods," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(1), pages 272-87, February.
  13. 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.
  14. John Y. Campbell & N. Gregory Mankiw, 1989. "Consumption, Income and Interest Rates: Reinterpreting the Time Series Evidence," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 185-246 National Bureau of Economic Research, Inc.
  15. Lawrence J. Christiano & Martin Eichenbaum & Charles L. Evans, 2005. "Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 1-45, February.
  16. 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.
  17. repec:fth:harver:1435 is not listed on IDEAS
  18. Ben S. Bernanke, 1981. "Permanent Income, Liquidity, and Expenditure on Automobiles: Evidence from Panel Data," NBER Working Papers 0756, National Bureau of Economic Research, Inc.
  19. Dale W. Jorgenson, 1998. "Growth, Volume 2: Energy, the Environment, and Economic Growth," MIT Press Books, The MIT Press, edition 1, volume 2, number 0262100746, December.
  20. Hiro Lee & Joaquim Oliveira Martins & Dominique van der Mensbrugghe, 1994. "The OECD Green Model: An Updated Overview," OECD Development Centre Working Papers 97, OECD Publishing.
  21. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 21-40.
  22. Mizobuchi, Kenichi, 2008. "An empirical study on the rebound effect considering capital costs," Energy Economics, Elsevier, vol. 30(5), pages 2486-2516, September.
  23. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  24. J. Daniel Khazzoom, 1989. "Energy Savings from More Efficient Appliances: A Rejoinder," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 157-166.
  25. Ratto, Marco & Roeger, Werner & Veld, Jan in 't, 2009. "QUEST III: An estimated open-economy DSGE model of the euro area with fiscal and monetary policy," Economic Modelling, Elsevier, vol. 26(1), pages 222-233, January.
  26. Kurt Kratena & Ina Meyer & Michael Wüger, 2009. "The Impact of Technological Change and Lifestyles on the Energy Demand of Households. A Combination of Aggregate and Individual Household Analysis," WIFO Working Papers 334, WIFO.
  27. Meyer, I. & Wessely, S., 2009. "Fuel efficiency of the Austrian passenger vehicle fleet--Analysis of trends in the technological profile and related impacts on CO2 emissions," Energy Policy, Elsevier, vol. 37(10), pages 3779-3789, October.
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 in new window

Cited by:
  1. Claudia Kettner & Angela Köppl & Sigrid Stagl, 2014. "Towards an operational measurement of socio-ecological performance," WWWforEurope Working Papers series 52, WWWforEurope.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wfo:wpaper:y:2010:i:382. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilse Schulz).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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