IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Technology invention and diffusion in residential energy consumption. A stochastic frontier approach

Listed author(s):
  • Giovanni Marin

    ()

    (IRCrES-CNR, Milano (Italy))

  • Alessandro Palma

    ()

    (IEFE-Bocconi, Milano (Italy))

Traditional large appliances absorb a large share of residential electricity consumption and represent important targets of energy policy strategies aimed at achieving energy security. Despite being characterized by rather mature technologies, this group of appliances still offers large potential in terms of efficiency gains due to their pervasive diffusion. In this paper we analyse the electricity consumption of a set of four traditional ‘white goods’ in a panel of ten EU countries observed over 21 years (1990-2010), with the aim of disentangling the amount of technical efficiency from the overall energy saving. The technical efficiency trend is modelled through a set of technology components representing both the invention and adoption process by the means of specific patents weighted by production and bilateral import flows, which allows to overcome the rigid Stochastic Frontier framework in modelling the effect of technical change. Our results show that the derived energy demand and inefficiency trends are both related to changes in the amount of available technology embodied in energy efficient appliances. The effect is significant both in its domestic and international components and suggests an active role of innovation and trade policies for achieving efficiency targets which directly impact the amount of electricity consumed by households.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/1415.pdf
File Function: First version, 2015
Download Restriction: no

File URL: http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/1415.pdf
File Function: Revised version, 2015
Download Restriction: no

Paper provided by SEEDS, Sustainability Environmental Economics and Dynamics Studies in its series SEEDS Working Papers with number 1415.

as
in new window

Length: 38 pages
Date of creation: Sep 2015
Date of revision: Sep 2015
Handle: RePEc:srt:wpaper:1415
Contact details of provider: Web page: http://www.sustainability-seeds.org

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
  2. Stern, David I., 2012. "Modeling international trends in energy efficiency," Energy Economics, Elsevier, vol. 34(6), pages 2200-2208.
  3. Alberini, Anna & Filippini, Massimo, 2011. "Response of residential electricity demand to price: The effect of measurement error," Energy Economics, Elsevier, vol. 33(5), pages 889-895, September.
  4. Jaffe Adam B. & Stavins Robert N., 1995. "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 43-63, November.
  5. Pedro Linares & Xavier Labandeira, 2010. "Energy Efficiency: Economics And Policy," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 573-592, 07.
  6. Filippini, Massimo & Hunt, Lester C., 2012. "US residential energy demand and energy efficiency: A stochastic demand frontier approach," Energy Economics, Elsevier, vol. 34(5), pages 1484-1491.
  7. Kaza, Nikhil, 2010. "Understanding the spectrum of residential energy consumption: A quantile regression approach," Energy Policy, Elsevier, vol. 38(11), pages 6574-6585, November.
  8. Kenneth Gillingham & Richard G. Newell & Karen Palmer, 2009. "Energy Efficiency Economics and Policy," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 597-620, September.
  9. Caudill, Steven B. & Ford, Jon M., 1993. "Biases in frontier estimation due to heteroscedasticity," Economics Letters, Elsevier, vol. 41(1), pages 17-20.
  10. Bosseboeuf, Didier & Chateau, Bertrand & Lapillonne, Bruno, 1997. "Cross-country comparison on energy efficiency indicators: the on-going European effort towards a common methodology," Energy Policy, Elsevier, vol. 25(7-9), pages 673-682.
  11. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
  12. Gale A. Boyd, 2008. "Estimating Plant Level Energy Efficiency with a Stochastic Frontier," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 23-44.
  13. Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, 01.
  14. Federico Belotti & Silvio Daidone & Giuseppe Ilardi & Vincenzo Atella, 2013. "Stochastic frontier analysis using Stata," Stata Journal, StataCorp LP, vol. 13(4), pages 718-758, December.
  15. Sorrell, Steve & Dimitropoulos, John, 2008. "The rebound effect: Microeconomic definitions, limitations and extensions," Ecological Economics, Elsevier, vol. 65(3), pages 636-649, April.
  16. Filippini, Massimo & Pachauri, Shonali, 2004. "Elasticities of electricity demand in urban Indian households," Energy Policy, Elsevier, vol. 32(3), pages 429-436, February.
  17. Nick Johnstone & Ivan Haščič & David Popp, 2010. "Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 133-155, January.
  18. Bronwyn H. Hall, 2010. "Measuring the Returns to R&D: The Depreciation Problem," NBER Chapters,in: Contributions in Memory of Zvi Griliches, pages 341-381 National Bureau of Economic Research, Inc.
  19. Kelly, S., 2011. "Do homes that are more energy efficient consume less energy?: A structural equation model for England's residential sector," Cambridge Working Papers in Economics 1139, Faculty of Economics, University of Cambridge.
  20. Frondel, Manuel & Horbach, Jens & Rennings, Klaus, 2008. "What triggers environmental management and innovation? Empirical evidence for Germany," Ecological Economics, Elsevier, vol. 66(1), pages 153-160, May.
  21. Hadri, Kaddour, 1999. "Estimation of a Doubly Heteroscedastic Stochastic Frontier Cost Function," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(3), pages 359-363, July.
  22. Filippini, Massimo, 1995. "Swiss residential demand for electricity by time-of-use," Resource and Energy Economics, Elsevier, vol. 17(3), pages 281-290, November.
  23. Lanjouw, Jean O & Pakes, Ariel & Putnam, Jonathan, 1998. "How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 405-432, December.
  24. Hung-jen Wang & Peter Schmidt, 2002. "One-Step and Two-Step Estimation of the Effects of Exogenous Variables on Technical Efficiency Levels," Journal of Productivity Analysis, Springer, vol. 18(2), pages 129-144, September.
  25. Mehdi Farsi & Massimo Filippini & William Greene, 2005. "Efficiency Measurement in Network Industries: Application to the Swiss Railway Companies," Journal of Regulatory Economics, Springer, vol. 28(1), pages 69-90, 07.
  26. Sue Wing, Ian & Eckaus, Richard S., 2007. "The implications of the historical decline in US energy intensity for long-run CO2 emission projections," Energy Policy, Elsevier, vol. 35(11), pages 5267-5286, November.
  27. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
  28. Ouyang, Jinlong & Long, Enshen & Hokao, Kazunori, 2010. "Rebound effect in Chinese household energy efficiency and solution for mitigating it," Energy, Elsevier, vol. 35(12), pages 5269-5276.
  29. David Popp, 2003. "Pollution control innovations and the Clean Air Act of 1990," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(4), pages 641-660.
  30. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 941-975.
  31. Fernandez, Viviana P., 2001. "Observable and unobservable determinants of replacement of home appliances," Energy Economics, Elsevier, vol. 23(3), pages 305-323, May.
  32. Ek, Kristina & Söderholm, Patrik, 2010. "The devil is in the details: Household electricity saving behavior and the role of information," Energy Policy, Elsevier, vol. 38(3), pages 1578-1587, March.
  33. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
  34. Jeroen Bergh, 2011. "Energy Conservation More Effective With Rebound Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(1), pages 43-58, January.
  35. Geroski, P. A., 2000. "Models of technology diffusion," Research Policy, Elsevier, vol. 29(4-5), pages 603-625, April.
  36. Datta, Souvik & Gulati, Sumeet, 2014. "Utility rebates for ENERGY STAR appliances: Are they effective?," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 480-506.
  37. Bruno Van Pottelsberghe & Herman Denis & Dominique Guellec, 2001. "Using patent counts for cross-country comparisons of technology output," ULB Institutional Repository 2013/6227, ULB -- Universite Libre de Bruxelles.
  38. Kelly, Scott, 2011. "Do homes that are more energy efficient consume less energy?: A structural equation model of the English residential sector," Energy, Elsevier, vol. 36(9), pages 5610-5620.
  39. Buck, J. & Young, D., 2007. "The potential for energy efficiency gains in the Canadian commercial building sector: A stochastic frontier study," Energy, Elsevier, vol. 32(9), pages 1769-1780.
  40. Costantini, Valeria & Liberati, Paolo, 2014. "Technology transfer, institutions and development," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 26-48.
  41. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 21-40.
  42. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
  43. Noailly, Joëlle, 2012. "Improving the energy efficiency of buildings: The impact of environmental policy on technological innovation," Energy Economics, Elsevier, vol. 34(3), pages 795-806.
  44. Valeria Costantini & Francesco Crespi & Alessandro Palma, 2015. "Characterizing the policy mix and its impact on eco-innovation in energy-efficient technologies," SEEDS Working Papers 1115, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jun 2015.
  45. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  46. Vanessa Oltra & Ray Kemp & Fred De Vries, 2010. "Patents as a measure for eco-innovation," Post-Print hal-00650904, HAL.
  47. Filippini, Massimo & Hunt, Lester C. & Zorić, Jelena, 2014. "Impact of energy policy instruments on the estimated level of underlying energy efficiency in the EU residential sector," Energy Policy, Elsevier, vol. 69(C), pages 73-81.
  48. Luis R. Murillo-Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, 02.
  49. Jeroen C.J.M. van den Bergh & Albert Faber & Annemarth M. Idenburg & Frans H. Oosterhuis, 2007. "Evolutionary Economics and Environmental Policy," Books, Edward Elgar Publishing, number 12511.
  50. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
  51. Massoud Karshenas & Paul L. Stoneman, 1993. "Rank, Stock, Order, and Epidemic Effects in the Diffusion of New Process Technologies: An Empirical Model," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 503-528, Winter.
  52. Vanessa OLTRA (GREThA UMR CNRS 5113) & René KEMP (University of Maastrich) & Frans P. de VRIES (University of Stirling), 2009. "Patents as a Measure for Eco-Innovation," Cahiers du GREThA 2009-05, Groupe de Recherche en Economie Théorique et Appliquée.
  53. Hung-Jen Wang, 2002. "Heteroscedasticity and Non-Monotonic Efficiency Effects of a Stochastic Frontier Model," Journal of Productivity Analysis, Springer, vol. 18(3), pages 241-253, November.
  54. Ang, B. W., 1995. "Multilevel decomposition of industrial energy consumption," Energy Economics, Elsevier, vol. 17(1), pages 39-51, January.
  55. Federico Belotti & Giuseppe Ilardi, 2012. "Consistent Estimation of the “True” Fixed-effects Stochastic Frontier Model," CEIS Research Paper 231, Tor Vergata University, CEIS, revised 18 Apr 2012.
  56. Malerba, Franco & Orsenigo, Luigi, 1996. "The Dynamics and Evolution of Industries," Industrial and Corporate Change, Oxford University Press, vol. 5(1), pages 51-87.
  57. Khademvatani, Asgar & Gordon, Daniel V., 2013. "A marginal measure of energy efficiency: The shadow value," Energy Economics, Elsevier, vol. 38(C), pages 153-159.
  58. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy-efficiency gap What does it mean?," Energy Policy, Elsevier, vol. 22(10), pages 804-810, October.
  59. Brounen, Dirk & Kok, Nils, 2011. "On the economics of energy labels in the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 166-179, September.
  60. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
  61. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  62. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
  63. Horbach, Jens, 2008. "Determinants of environmental innovation--New evidence from German panel data sources," Research Policy, Elsevier, vol. 37(1), pages 163-173, February.
  64. Jean O. Lanjouw & Mark Schankerman, 2004. "Patent Quality and Research Productivity: Measuring Innovation with Multiple Indicators," Economic Journal, Royal Economic Society, vol. 114(495), pages 441-465, 04.
  65. Saidur, R. & Masjuki, H.H. & Jamaluddin, M.Y. & Ahmed, S., 2007. "Energy and associated greenhouse gas emissions from household appliances in Malaysia," Energy Policy, Elsevier, vol. 35(3), pages 1648-1657, March.
  66. Costantini, Valeria & Crespi, Francesco & Martini, Chiara & Pennacchio, Luca, 2015. "Demand-pull and technology-push public support for eco-innovation: The case of the biofuels sector," Research Policy, Elsevier, vol. 44(3), pages 577-595.
  67. 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.
  68. Markandya, Anil & Pedroso-Galinato, Suzette & Streimikiene, Dalia, 2006. "Energy intensity in transition economies: Is there convergence towards the EU average?," Energy Economics, Elsevier, vol. 28(1), pages 121-145, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:srt:wpaper:1415. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alessandro Palma)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.