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Energy Hogs and Energy Angels: What Does Residential Electricity Use Really Tell Us about Profligate Consumption?

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  • Severin Borenstein

Abstract

High residential volumetric electricity prices are partially justified as placing more of the cost burden on less prudent households, so-called "energy hogs." I show that the difference in means between above-median and below-median household consumption declines by 60–90 percent after adjusting for three factors: number of household occupants, local climate variation, and adoption of rooftop solar. Failure to make these adjustments disproportionately hurts low-income households. Focusing on residential electricity is especially problematic because nationally it accounts for less than 15 percent of energy and less than 10 percent of greenhouse gas emissions, while such penalty pricing is virtually nonexistent elsewhere in the economy.

Suggested Citation

  • Severin Borenstein, 2025. "Energy Hogs and Energy Angels: What Does Residential Electricity Use Really Tell Us about Profligate Consumption?," AEA Papers and Proceedings, American Economic Association, vol. 115, pages 357-362, May.
    • Handle: RePEc:aea:apandp:v:115:y:2025:p:357-62
    DOI: 10.1257/pandp.20251111
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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