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Residential energy use and conservation: Economics and demographics

  • Brounen, Dirk
  • Kok, Nils
  • Quigley, John M.

Energy consumption in the residential sector offers an important opportunity for conserving resources. However, much of the current debate regarding energy efficiency in the housing market focuses on the physical and technical determinants of energy consumption, neglecting the role of the economic behavior of resident households. In this paper, we analyze the extent to which the use of gas and electricity is determined by the technical specifications of the dwelling as compared to the demographic characteristics of the residents. Our analysis is based on a sample of more than 300,000 Dutch homes and their occupants. The results indicate that residential gas consumption is determined principally by structural dwelling characteristics, such as the vintage, building type, and characteristics of the dwelling, while electricity consumption varies more directly with household composition, in particular income and family composition. Combining these results with projections on future economic and demographic trends, we find that, even absent price increases for residential energy, the aging of the population and their increasing wealth will roughly offset improvements in the energy efficiency of the building stock resulting from policy interventions and natural revitalization.

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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 56 (2012)
Issue (Month): 5 ()
Pages: 931-945

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Handle: RePEc:eee:eecrev:v:56:y:2012:i:5:p:931-945
Contact details of provider: Web page: http://www.elsevier.com/locate/eer

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  1. Arik Levinson, 2001. "Energy Use By Apartment Tenants When Landlords Pay For Utilities," Working Papers gueconwpa~01-01-09, Georgetown University, Department of Economics.
  2. Train, Kenneth, 1985. "Discount rates in consumers' energy-related decisions: A review of the literature," Energy, Elsevier, vol. 10(12), pages 1243-1253.
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  5. Helena Meier & Katrin Rehdanz, 2008. "Determinants of Residential Space Heating Expenditures in Great Britain," Working Papers FNU-166, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2008.
  6. Piet Eichholtz & Nils Kok & John M. Quigley, 2010. "Doing Well by Doing Good? Green Office Buildings," American Economic Review, American Economic Association, vol. 100(5), pages 2492-2509, December.
  7. Peter C. Reiss & Matthew W. White, 2005. "Household Electricity Demand, Revisited," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 853-883.
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  9. 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.
  10. Brounen, Dirk & Kok, Nils, 2011. "On the economics of energy labels in the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 166-179, September.
  11. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  12. Wilhite, Harold & Nakagami, Hidetoshi & Masuda, Takashi & Yamaga, Yukiko & Haneda, Hiroshi, 1996. "A cross-cultural analysis of household energy use behaviour in Japan and Norway," Energy Policy, Elsevier, vol. 24(9), pages 795-803, September.
  13. Ian Ayres & Sophie Raseman & Alice Shih, 2009. "Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage," NBER Working Papers 15386, National Bureau of Economic Research, Inc.
  14. Van Raaij, W. Fred & Verhallen, Theo M. M., 1983. "A behavioral model of residential energy use," Journal of Economic Psychology, Elsevier, vol. 3(1), pages 39-63.
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