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Measuring energy efficiency and rebound effects using a stochastic demand frontier approach: the US residential energy demand

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  • Orea, Luis
  • Llorca, Manuel
  • Filippini, Massimo

Abstract

This paper brings attention to the fact that the energy demand frontier model introduced by Filippini and Hunt (2011, 2012) is closely connected to the measurement of the so-called rebound effect associated with improvements in energy efficiency. In particular, we show that their model implicitly imposes a zero rebound effect, which contradicts most of the available empirical evidence on this issue. We relax this restrictive assumption through the modelling of a rebound-effect function that mitigates or intensifies the effect of an efficiency improvement on energy consumption. We illustrate our model with an empirical application that aims to estimate a US frontier residential aggregate energy demand function using panel data for 48 states over the period 1995 to 2011.

Suggested Citation

  • Orea, Luis & Llorca, Manuel & Filippini, Massimo, 2014. "Measuring energy efficiency and rebound effects using a stochastic demand frontier approach: the US residential energy demand," Efficiency Series Papers 2014/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    • Handle: RePEc:oeg:wpaper:2014/01
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Antonio Carvalho, 2016. "Energy Efficiency in Transition Economies: A Stochastic Frontier Approach," CEERP Working Paper Series 004, Centre for Energy Economics Research and Policy, Heriot-Watt University.
    2. António Carvalho, 2018. "Energy efficiency in transition economies : A stochastic frontier approach," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(3), pages 553-578, July.
    3. Massimo Filippini & Luis Orea, 2014. "Applications of the stochastic frontier approach in Energy Economics," Economics and Business Letters, Oviedo University Press, vol. 3(1), pages 35-42.

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    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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