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Why Has California's Residential Electricity Consumption Been So Flat since the 1980s?: A Microeconometric Approach

  • Dora L. Costa
  • Matthew E. Kahn

We use detailed microeconomic data to investigate why aggregate residential electricity consumption in California has been flat since 1980. Using unique micro data, we document the role that household demographics and ideology play in determining electricity demand. We show that building codes have been effective for homes built after 1983. We find that houses built in the 1970s and early 1980s were energy inefficient relative to houses built before 1960 because the price of electricity at the time of construction was low. Employing our regression estimates, we construct an aggregate residential electricity consumption time series index from 1980 to 2006. We show that certain micro determinants of household electricity consumption such as the phase in of building codes explain California's flat consumption while other factors (such as rising incomes and increased new home sizes) go in the opposite direction. Because homes are long-lived durables, we have not yet seen the full impact of building codes on California's electricity consumption.

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File URL: http://www.nber.org/papers/w15978.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15978.

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Date of creation: May 2010
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Handle: RePEc:nbr:nberwo:15978
Note: EEE
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  1. Kahn, Matthew E., 2007. "Do greens drive Hummers or hybrids? Environmental ideology as a determinant of consumer choice," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 129-145, September.
  2. Mansur, Erin T. & Mendelsohn, Robert & Morrison, Wendy, 2008. "Climate change adaptation: A study of fuel choice and consumption in the US energy sector," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 175-193, March.
  3. Matthew J. Kotchen & Michael R. Moore, 2004. "Private Provision of Environmental Public Goods: Household Participation in Green-Electricity Programs," Department of Economics Working Papers 2004-07, Department of Economics, Williams College.
  4. Anin Aroonruengsawat & Maximilian Auffhammer, 2011. "Impacts of Climate Change on Residential Electricity Consumption: Evidence from Billing Data," NBER Chapters, in: The Economics of Climate Change: Adaptations Past and Present, pages 311-342 National Bureau of Economic Research, Inc.
  5. Lucas W. Davis, 2008. "Durable goods and residential demand for energy and water: evidence from a field trial," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 530-546.
  6. Kahn Matthew E & Vaughn Ryan K., 2009. "Green Market Geography: The Spatial Clustering of Hybrid Vehicles and LEED Registered Buildings," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(2), pages 1-24, March.
  7. Peter C. Reiss & Matthew W. White, 2008. "What changes energy consumption? Prices and public pressures," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 636-663.
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