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Direct and Indirect Energy Rebound Effects in German Households: A Linearized Almost Ideal Demand System Approach

Author

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  • Hendrik Schmitz

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Reinhard Madlener

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

We estimate direct and indirect energy rebound effects for a wide variety of goods and services in Germany. To this end, we employ a linearized approximation of the popular Almost Ideal Demand System (LAIDS) approach suggested by Deaton and Muellbauer (1980). Excluding measures of energy efficiency when estimating rebound can lead to biased results. We alleviate this shortcoming previous research has suffered from by explicitly accounting for energy efficiency in our estimations. Using data for Germany from 1970 to 2014, we find moderate direct and significant indirect rebound effects for different energy carriers across four model specifications. Income rebound effects are counterbalanced by significant negative substitution effects, which in some cases even lead to negative overall rebound estimates.

Suggested Citation

  • Hendrik Schmitz & Reinhard Madlener, 2017. "Direct and Indirect Energy Rebound Effects in German Households: A Linearized Almost Ideal Demand System Approach," FCN Working Papers 10/2017, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    • Handle: RePEc:ris:fcnwpa:2017_010
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    References listed on IDEAS

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    22. Julius Frieling & Reinhard Madlener, 2017. "Fueling the US Economy: Energy as a Production Factor from the Great Depression until Today," FCN Working Papers 2/2017, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
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    Citations

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    Cited by:

    1. Paula Pereda & Maria Alice Christofoletti, 2019. "Heterogeneous welfare and emission effects of energy tax policies in Brazil," Working Papers, Department of Economics 2019_32, University of São Paulo (FEA-USP).
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    3. Colmenares, Gloria & Löschel, Andreas & Madlener, Reinhard, 2019. "The rebound effect and its representation in energy and climate models," CAWM Discussion Papers 106, University of Münster, Münster Center for Economic Policy (MEP).
    4. Huntington, Hillard G., 2024. "US gasoline response to vehicle fuel efficiency: A contribution to the direct rebound effect," Energy Economics, Elsevier, vol. 136(C).
    5. Moz-Christofoletti, Maria Alice & Pereda, Paula Carvalho, 2021. "Distributional welfare and emission effects of energy tax policies in Brazil," Energy Economics, Elsevier, vol. 104(C).
    6. Heesen, Florian & Madlener, Reinhard, 2021. "Revisiting heat energy consumption modeling: Household production theory applied to field experimental data," Energy Policy, Elsevier, vol. 158(C).
    7. Daniel Höwer & Christian A. Oberst & Reinhard Madlener, 2017. "Regionalization Heuristic to Map Spatial Heterogeneity of Macroeconomic Impacts: The Case of the Green Energy Transition in NRW," FCN Working Papers 13/2017, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    8. Pereira, Guillermo Ivan & Specht, Jan Martin & Silva, Patrícia Pereira & Madlener, Reinhard, 2018. "Technology, business model, and market design adaptation toward smart electricity distribution: Insights for policy making," Energy Policy, Elsevier, vol. 121(C), pages 426-440.

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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