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The effect of house energy efficiency programs on the extensive and intensive margin of lower-income households’ investment behavior

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  • Drivas, Kyriakos
  • Rozakis, Stelios
  • Xesfingi, Sofia

Abstract

This paper examines the biggest house energy efficiency retrofit support program in Greece which ran during 2011–2015 and approximately fifty thousand households participated. We take advantage of an exogenous policy change resulting in cost reduction for households that occurred while the program was running. This change substantially increased the subsidy rate for lower-income households. We find that this effective cost reduction increased the participation rate (extensive margin). We add to the literature on retrofits by further showing that this change increased substantially the investment amount (intensive margin) of these lower-income households. Detailed data on a sub-sample of households reveal that this increase was driven primarily by window replacement and thermal insulation investments.

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  • Drivas, Kyriakos & Rozakis, Stelios & Xesfingi, Sofia, 2019. "The effect of house energy efficiency programs on the extensive and intensive margin of lower-income households’ investment behavior," Energy Policy, Elsevier, vol. 128(C), pages 607-615.
    • Handle: RePEc:eee:enepol:v:128:y:2019:i:c:p:607-615
    DOI: 10.1016/j.enpol.2019.01.040
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    More about this item

    Keywords

    Q40; Q48; R20; Energy efficiency retrofits; Subsidy; Exogenous change; Extensive and intensive margin; Household investment;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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