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The Full Impact of Energy Efficiency on Households' Energy Demand


  • Kurt Kratena
  • Michael Wüger



This paper deals with technical progress in the energy efficiency of US households' capital stock (appliances and passenger cars) and its potential for energy saving. An increase in the energy efficiency of households can only be achieved via a different capital stock. The link between the average energy efficiency and the stock of energy-using durables is econometrically estimated based on a new data set of household appliances and passenger cars. This relationship complements a Quadratic Almost Ideal Demand System (QUAIDS) for six consumption categories (non-durables), including heating, electricity and transport. Any increase in energy efficiency lowers the corresponding "service" price and leads to a "rebound effect". A simulation exercise shows how the ceteris paribus-rebound effect is changed by taking into account the capital costs and other interdependencies and feedbacks that can only be captured by a full model of household demand.

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  • Kurt Kratena & Michael Wüger, 2010. "The Full Impact of Energy Efficiency on Households' Energy Demand," WIFO Working Papers 356, WIFO.
  • Handle: RePEc:wfo:wpaper:y:2010:i:356

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    References listed on IDEAS

    1. Jose Luengo-Prado, Maria, 2006. "Durables, nondurables, down payments and consumption excesses," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1509-1539, October.
    2. Sue Wing, Ian, 2006. "Representing induced technological change in models for climate policy analysis," Energy Economics, Elsevier, vol. 28(5-6), pages 539-562, November.
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    Cited by:

    1. Moshiri, Saeed & Aliyev, Kamil, 2017. "Rebound effect of efficiency improvement in passenger cars on gasoline consumption in Canada," Ecological Economics, Elsevier, vol. 131(C), pages 330-341.
    2. Thomas, Brinda A. & Azevedo, Inês L., 2013. "Estimating direct and indirect rebound effects for U.S. households with input–output analysis Part 1: Theoretical framework," Ecological Economics, Elsevier, vol. 86(C), pages 199-210.
    3. N. N., 2015. "WIFO-Monatsberichte, issue 7/2015," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(7), July.
    4. Daniela Kletzan-Slamanig & Claudia Kettner & Angela Köppl & Ina Meyer & Franz Sinabell, 2015. "Key Indicators of Climate Change and the Energy Sector in 2015. Special Topic: Using Energy Efficiency to Boost Decarbonisation," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(7), pages 593-607, July.

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    household energy demand; embodied and induced technical change; rebound effect;

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