13th session of seminars on research in energy economics at paris-sciences-lettres
Abstract
PROGRAMME AND PRESENTATIONS
The Seminar on Research in Energy Economics at Paris-Sciences-Lettres is jointly organized by the CERNA, the CGEMP, the Chaire European Electricity Markets, Mines ParisTech and University Paris-Dauphine. It is animated by François LEVEQUE (CERNA et MINES PARIS TECH) and Dominique FINON (Chaire European Electricity Markets, CNRS-CIRED).
Erdal AYDIN, Research Centre on Sustainability, Tilburg University
Energy Efficiency and Household Behavior: The Rebound Effect in the Residential Sector
Presentation
The Rebound Effect in the Residential Sector
Matthieu GLACHANT, Professor of Economics, Director of CERNA, MinesParisTech
The impact of energy prices on energy efficiency: evidence from the UK refrigerator market
Presentation
Summary of the presentations
Erdal AYDIN, Research Centre on Sustainability, Tilburg University
Energy Efficiency and Household Behavior: The Rebound Effect in the Residential Sector
A widely acknowledged explanation for the energy efficiency gap between expected and realized energy savings is household behavior, as energy efficiency gains alter the perceived cost of comfort and may thereby generate shifts in consumption patterns. This paper adds to the on-going discussion about the method of identification and the magnitude of the rebound effect, by examining the elasticity of energy consumption relative to a predicted measure of thermal efficiency, using a sample of half million dwellings and their occupants in the Netherlands. The results show a rebound effect of 26.7 percent among homeowners, and 41.3 percent among tenants. There is significant heterogeneity in the rebound effect across households, determined by household wealth and income. The effects are largest among the lower income and wealth cohorts and among households that tend to use more energy than the average household. We then corroborate our findings by applying a quasi-experimental analysis. We document that efficiency improvements following a large subsidy program also lead to a rebound effect of about 56 percent. This finding conforms the important role of household behavior in determining the outcomes of energy efficiency improvement programs. (Working paper with Nils Kok, Professor, Economics Research Institute, Maastricht University).
Matthieu GLACHANT, Professor of Economics, Director of CERNA, MinesParisTech
The impact of energy prices on energy efficiency: evidence from the UK refrigerator market
It is frequently argued in policy circles that imperfect information and other cognitive constraints may lead consumers to discard privately profitable investments in energy efficiency. Using product level panel data from 2002 to 2007 on the UK refrigerator market and a discrete-choice framework, we reject this view: our estimate is that purchasers of refrigerators implicitly discount future electricity costs at a reasonably low rate of 10.5%. As consumers apparently make rational investment decisions, taxing energy would be the route to further increase energy efficiency. However, we make simulations which demonstrate a very small elasticity of energy use to the price of electricity (-0.16). The reason is that most of the energy cost increase is compensated by suppliers through relatively larger price reductions of highly energy consuming products. This finding calls for moving attention in the energy efficiency debate to the pricing behavior of manufacturers of durables. (CERNA Working Paper with Francois Cohen (CERNA) and Magnus Soderberg (CERNA)).
