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The influence of price and non-price effects on demand for heating in the EU residential sector

Author

Listed:
  • Eoin Ó Broin

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, Chalmers University of Technology [Göteborg])

  • Jonas Nässén

    (Chalmers University of Technology [Göteborg])

  • Filip Johnsson

    (Chalmers University of Technology [Göteborg])

Abstract

This paper models energy demand for space and water heating from 1970 to 2005 in the residential sector of four EU countries (France, Italy, Sweden, and UK) using index decomposition, ARDL econometric models and cointegration analysis. The partial and temporal influences on energy demand in each country of the number of households, floor area per household (m2) and unit consumption for space and water heating (kWh/m2/year) are disaggregated. The long-run price elasticity of demand at the unit consumption level is found to be low (around -0.25 over the four countries) while the long-run income elasticity of floor area per household is found to be around 0.25 for Italy, Sweden and the UK but insignificant for France. In an exercise using the model to estimate demand to 2050 under annual increases in energy prices of between 0% and 3% it is found that non-price effects such as building codes and autonomous technical progress (represented in the model as a time trend) are equally or more important than the price effect in reducing demand. Thus achieving significant reductions in EU residential sector energy demand by 2050 would require additional non-price policies and measures for success.

Suggested Citation

  • Eoin Ó Broin & Jonas Nässén & Filip Johnsson, 2015. "The influence of price and non-price effects on demand for heating in the EU residential sector," Post-Print hal-01219278, HAL.
    • Handle: RePEc:hal:journl:hal-01219278
    DOI: 10.1016/j.energy.2014.12.003
    Note: View the original document on HAL open archive server: https://hal.science/hal-01219278v2
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    References listed on IDEAS

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    Cited by:

    1. Sofia Tsemekidi Tzeiranaki & Paolo Bertoldi & Francesca Diluiso & Luca Castellazzi & Marina Economidou & Nicola Labanca & Tiago Ribeiro Serrenho & Paolo Zangheri, 2019. "Analysis of the EU Residential Energy Consumption: Trends and Determinants," Energies, MDPI, vol. 12(6), pages 1-27, March.
    2. 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.
    3. Guo, Xiaodan & Xiao, Bowen, 2022. "How can pricing strategy for district heating help China realize cleaner residential heating?," Energy Economics, Elsevier, vol. 110(C).
    4. Laes, Erik & Mayeres, Inge & Renders, Nele & Valkering, Pieter & Verbeke, Stijn, 2018. "How do policies help to increase the uptake of carbon reduction measures in the EU residential sector? Evidence from recent studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 234-250.
    5. Ott, Laurent & Weber, Sylvain, 2022. "How effective is carbon taxation on residential heating demand? A household-level analysis," Energy Policy, Elsevier, vol. 160(C).
    6. Langevin, J. & Reyna, J.L. & Ebrahimigharehbaghi, S. & Sandberg, N. & Fennell, P. & Nägeli, C. & Laverge, J. & Delghust, M. & Mata, É. & Van Hove, M. & Webster, J. & Federico, F. & Jakob, M. & Camaras, 2020. "Developing a common approach for classifying building stock energy models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    7. Park, Changeun & Shin, Jungwoo, 2024. "Forecasting of changes in electricity consumption due to EV diffusion in South Korea: Development of integrated model considering diffusion and macro-econometric model," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    8. Sophie M. Behr & Till Köveker & Merve Kücük, 2025. "Understanding Energy Savings in a Crisis: The Role of Prices and Non-monetary Factors," Discussion Papers of DIW Berlin 2112, DIW Berlin, German Institute for Economic Research.

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