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A Behavioral Economics Approach to Residential Electricity Consumption

Author

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  • Luciano C. Siebert

    (Department of Electricity and Materials, Lactec Institutes, Curitiba 81530-180, Brazil
    Department of Electrical Engineering, Federal University of Parana, Curitiba 82590-300, Brazil)

  • Adriana Sbicca

    (Department of Economics, Federal University of Parana, Curitiba 80210-170, Brazil)

  • Alexandre Rasi Aoki

    (Department of Electricity and Materials, Lactec Institutes, Curitiba 81530-180, Brazil
    Department of Electrical Engineering, Federal University of Parana, Curitiba 82590-300, Brazil)

  • Germano Lambert-Torres

    (Gnarus Institute, Itajuba 37500-052, Brazil)

Abstract

Consumer behavior is complex and is difficult to represent in traditional economic theories of decision-making. This paper focuses on the development of an agent-based approach to analyze people’s behavior in consuming electricity using a behavioral economics framework, where the consumer is the main agent of power systems. This approach may bring useful insights for distribution companies and regulatory agencies, helping to shift thinking to a more user-centric approach. The emergent properties of electricity consumption are modeled by the means of consumer’s heuristics, taking into account the electricity price, consumer’s satisfaction level, willingness to invest in new technologies, social interactions, and marketing strategies by the power utility. Analysis on the emergent behavior of this approach through simulation studies showed that it is indeed valuable, as does not require in-depth data of all details on human behavior. However, it contributes to the understanding of relations among various objects involved in electricity consumption.

Suggested Citation

  • Luciano C. Siebert & Adriana Sbicca & Alexandre Rasi Aoki & Germano Lambert-Torres, 2017. "A Behavioral Economics Approach to Residential Electricity Consumption," Energies, MDPI, vol. 10(6), pages 1-18, June.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:6:p:768-:d:100259
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    3. Cosmina-Simona Toader & Ciprian Ioan Rujescu & Andrea Feher & Cosmin Salasan & Lavinia Denisia Cuc & Karoly Bodnar, 2023. "Generation Differences in the Behaviour of Household Consumers in Romania Related to Voluntary Measures to Reduce Electric Energy Consumption," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 25(64), pages 710-710, August.
    4. Iztok Podbregar & Sanja Filipović & Mirjana Radovanović & Olga Mirković Isaeva & Polona Šprajc, 2021. "Electricity Prices and Consumer Behavior, Case Study Serbia—Randomized Control Trials Method," Energies, MDPI, vol. 14(3), pages 1-12, January.
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    6. Mohseni, Soheil & Brent, Alan C. & Kelly, Scott & Browne, Will N., 2022. "Demand response-integrated investment and operational planning of renewable and sustainable energy systems considering forecast uncertainties: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
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    8. Luciano Cavalcante Siebert & Alexandre Rasi Aoki & Germano Lambert-Torres & Nelson Lambert-de-Andrade & Nikolaos G. Paterakis, 2020. "An Agent-Based Approach for the Planning of Distribution Grids as a Socio-Technical System," Energies, MDPI, vol. 13(18), pages 1-13, September.
    9. Satoshi Nakano & Ayu Washizu, 2020. "On the Acceptability of Electricity Demand Side Management by Time of Day," Energies, MDPI, vol. 13(14), pages 1-21, July.
    10. Carlos Henrique Valério de Moraes & Jonas Lopes de Vilas Boas & Germano Lambert-Torres & Gilberto Capistrano Cunha de Andrade & Claudio Inácio de Almeida Costa, 2022. "Intelligent Power Distribution Restoration Based on a Multi-Objective Bacterial Foraging Optimization Algorithm," Energies, MDPI, vol. 15(4), pages 1-23, February.
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