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What Matters for Electrification? Evidence from 70 Years of U.S. Home Heating Choices

Author

Listed:
  • Lucas W. Davis

    (University of California, Berkeley, Energy Institute at Haas, and NBER)

Abstract

The percentage of U.S. homes heated with electricity has increased steadily from 1% in 1950 to 40% in 2020. Energy prices, geography, climate, housing characteristics, and income are shown to explain 90% of the increase, with energy prices by far the most important factor. The paper then estimates the cost of an electrification mandate for new homes. Households in warm states tend to prefer electricity anyway, so would be made worse off by less than $350 annually on average. Households in cold states, however, tend to prefer natural gas so would be made worse off by more than $1,000 annually.

Suggested Citation

  • Lucas W. Davis, 2025. "What Matters for Electrification? Evidence from 70 Years of U.S. Home Heating Choices," The Review of Economics and Statistics, MIT Press, vol. 107(3), pages 668-684, May.
    • Handle: RePEc:tpr:restat:v:107:y:2025:i:3:p:668-684
    DOI: 10.1162/rest_a_01292
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    Citations

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    Cited by:

    1. is not listed on IDEAS
    2. Jens Ewald & Thomas Sterner & Eoin Ó Broin & Érika Mata, 2021. "Saving energy in residential buildings: the role of energy pricing," Climatic Change, Springer, vol. 167(1), pages 1-20, July.
    3. Singhal, Puja & Pahle, Michael & Kalkuhl, Matthias & Levesque, Antoine & Sommer, Stephan & Berneiser, Jessica, 2022. "Beyond good faith: Why evidence-based policy is necessary to decarbonize buildings cost-effectively in Germany," Energy Policy, Elsevier, vol. 169(C).
    4. Lucas W. Davis, 2023. "Evidence of a Homeowner-Renter Gap for Electric Appliances," The Energy Journal, , vol. 44(4), pages 53-64, July.
    5. Gechert, Sebastian & Mey, Bianka & Prante, Franz & Schäfer, Teresa, 2025. "The Price Elasticity of Heating and Cooling Energy Demand," OSF Preprints 4sjy5_v2, Center for Open Science.
    6. Hirth, Lion & Khanna, Tarun & Ruhnau, Oliver, 2022. "The (very) short-term price elasticity of German electricity demand," EconStor Preprints 249570, ZBW - Leibniz Information Centre for Economics.
    7. Borenstein, Severin & Bushnell, James, 2021. "Issues, Questions, and a Research Agenda for the Role of Pricing in Residential Electrification," RFF Working Paper Series 21-35, Resources for the Future.
    8. Fernando Martins & Pedro Moura & Aníbal T. de Almeida, 2022. "The Role of Electrification in the Decarbonization of the Energy Sector in Portugal," Energies, MDPI, vol. 15(5), pages 1-35, February.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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