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How Technological Potentials are Undermined by Economic and Behavioural Responses - The Treatment Effect of Endogenous Energy Efficiency Measures

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  • Meier, Helena

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))

  • Tode, Christian

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))

Abstract

Governments worldwide spend increasing amounts of money on policy schemes to reduce energy consumption and related carbon emissions. We investigate the actual treatment effect of energy efficiency measures and therein compare actual demand responses to technological potentials. Based on a demand system analysis of household data and by approximating unobserved energy awareness, we find economic and behavioural responses that counteract expected savings from energy efficiency. Results show strong rebound and even backfiring effects but also suggest heterogeneity of the effectiveness driven by behavioural concepts, such as sunk cost fallacy or habit formation. Understanding these can contribute to target-oriented policy designs and increased effectiveness and efficiency of policies.

Suggested Citation

  • Meier, Helena & Tode, Christian, 2015. "How Technological Potentials are Undermined by Economic and Behavioural Responses - The Treatment Effect of Endogenous Energy Efficiency Measures," EWI Working Papers 2015-4, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    • Handle: RePEc:ris:ewikln:2015_004
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    References listed on IDEAS

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    1. Henningsen, Geraldine & Wiese, Catharina, 2019. "Do Household Characteristics Really Matter? A Meta-Analysis on the Determinants of Households’ Energy-Efficiency Investments," MPRA Paper 101701, University Library of Munich, Germany.

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    More about this item

    Keywords

    Policy evaluation; household demand; unobserved heterogeneity; energy efficiency;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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