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Information v. energy efficiency incentives: Evidence from residential electricity consumption in Maryland

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  • Alberini, Anna
  • Towe, Charles

Abstract

We focus on two utility programs intended to reduce energy usage and the associated CO2 emissions—a home energy audit and rebates on the purchase of high-efficiency air-source heat pumps. We use a unique panel dataset from participating and non-participating households to estimate the average treatment effect of participating in either program on electricity usage. We fit models with household-by-season, season-by-year, and household-by-year fixed effects to account for all possible confounders that might influence energy usage. Since the programs are voluntary, we seek to restore near-exogeneity of the program “treatment” by matching participating households with control households. We deploy coarsened exact matching (CEM; Iacus et al., 2011) as our main matching method. We ask whether it is sufficient to match households based on past electricity usage, or if we gain by adding structural characteristics of the home, including heating system type. We find that the two programs reduce electricity usage by 5% on average. The effects are strong in both winter and summer for the energy audit groups but appear to be stronger in the winter for the heat pump rebate group. Adding house characteristics to the matching variables does seem to affect results, suggesting that using past usage alone, or house characteristics alone, may not be sufficient to identify the effects of program participation.

Suggested Citation

  • Alberini, Anna & Towe, Charles, 2015. "Information v. energy efficiency incentives: Evidence from residential electricity consumption in Maryland," Energy Economics, Elsevier, vol. 52(S1), pages 30-40.
    • Handle: RePEc:eee:eneeco:v:52:y:2015:i:s1:p:s30-s40
    DOI: 10.1016/j.eneco.2015.08.013
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    More about this item

    Keywords

    Energy efficiency; Household behavior; Energy efficiency incentives; Electricity usage; Home energy audit;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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