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Energy Consumption in the French Residential Sector: How Much do Individual Preferences Matter?

Author

Listed:
  • Salomé Bakaloglou

    (CSTB-Université de Montpellier-Chaire économie du climat)

  • Dorothée Charlier

    (Institut de Recherche en Gestion et Économie (IREGE) Institut de Management Université de Savoie Mont Blanc)

Abstract

The aim of this research is to understand the weight of preference heterogeneity in explaining energy consumption in French homes. Using a discrete-continuous model and the conditional mixed-process estimator (CMP) allows us to tackle two potential endogeneities in residential energy consumption: energy prices and the choice of equipment. As a major contribution, we provide evidence that preferences for comfort over energy savings do have significant direct and indirect impacts on energy consumption, especially for high-income households. Preferring comfort over economy or one additional degree of heating implies an average energy overconsumption of 10% and 7.8% respectively, up to 36% for high-income households. Our results strengthen the belief that household heterogeneity is a substantial factor in explaining energy consumption and could have meaningful implications for the design of public policy tools aimed at reducing energy consumption in the residential sector

Suggested Citation

  • Salomé Bakaloglou & Dorothée Charlier, 2018. "Energy Consumption in the French Residential Sector: How Much do Individual Preferences Matter?," Working Papers 2018.05, FAERE - French Association of Environmental and Resource Economists.
  • Handle: RePEc:fae:wpaper:2018.05
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    Cited by:

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    2. Fleckinger, Pierre & Glachant, Matthieu & Tamokoué Kamga, Paul-Hervé, 2019. "Energy Performance Certificates and investments in building energy efficiency: A theoretical analysis," Energy Economics, Elsevier, vol. 84(S1).
    3. Fateh Belaid, Adel Ben Youssef, Nessrine Omrani, 2020. "Investigating the factors shaping residential energy consumption patterns in France: evidence form quantile regression," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 17(1), pages 127-151, June.
    4. Marion Podesta & Jean-Christophe Poudou & Michel Roland, 2021. "The Price Impact of Energy Vouchers," The Energy Journal, , vol. 42(3), pages 27-54, May.
    5. Charlier, Dorothée, 2021. "Explaining the energy performance gap in buildings with a latent profile analysis," Energy Policy, Elsevier, vol. 156(C).
    6. Frédéric Cherbonnier & Christian Gollier, 2022. "Risk-adjusted Social Discount Rates," Post-Print hal-04012977, HAL.
    7. Fateh Belaïd & Christophe Rault & Camille Massié, 2022. "A life-cycle theory analysis of French household electricity demand," Journal of Evolutionary Economics, Springer, vol. 32(2), pages 501-530, April.
    8. Chaudhuri, Kausik & Huaccha, Gissell, 2023. "Who bears the energy cost? Local income deprivation and the household energy efficiency gap," Energy Economics, Elsevier, vol. 127(PA).
    9. Charlier, Dorothée & Legendre, Bérangère & Ricci, Olivia, 2021. "Measuring fuel poverty in tropical territories: A latent class model," World Development, Elsevier, vol. 140(C).
    10. Dorothée Charlier & Bérangère Legendre, 2021. "Carbon Dioxide Emissions and Aging: Disentangling Behavior from Energy Efficiency," Post-Print hal-03877220, HAL.
    11. Dorothée Charlier & Bérangère Legendre, 2020. "Carbon Dioxide Emissions and aging: Disentangling behavior from energy efficiency," Working Papers 2020.13, FAERE - French Association of Environmental and Resource Economists.
    12. Frederic Cherbonnier & Christian Gollier, 2022. "Risk-adjusted Social Discount Rates," The Energy Journal, , vol. 43(4), pages 45-68, May.
    13. Fateh Belaïd & Christophe Rault & Camille Massié, 2021. "A Life-Cycle Analysis of French Household Electricity Demand," CESifo Working Paper Series 8814, CESifo.
    14. Simonovits, András & Kotek, Péter & Horváth, Gábor & Takácsné Tóth, Borbála, 2023. "Az energiaárak támogatása Magyarországon - egy egyszerű modell [Subsidizing energy prices in Hungary - a simple model]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 589-612.
    15. Dorothée Charlier, 2021. "Explaining the energy performance gap in buildings with a latent profile analysis," Post-Print hal-03894155, HAL.

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    More about this item

    Keywords

    residential energy consumption; household preferences; discrete-continuous choice method; conditional mixed process;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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