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Urban Residential Energy Demand and Rebound Effect in China: A Stochastic Energy Demand Frontier Approach

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  • Kerui Du
  • Shuai Shao
  • Zheming Yan

Abstract

The energy rebound effect is a potential threat to energy-saving targets based on energy efficiency improvements. This paper employs a stochastic energy demand frontier model to analyze the energy demand and rebound effect in China’s urban residential sector. Using a panel data set of 30 Chinese provincial-level regions over the period 2001-2014, for the first time, we investigate the degrees and determinants of China’s urban residential energy demand and energy rebound effect.The results show that residents’ income level, energy price, temperature deviation, population scale, household size, and district heating system are significant influencing factors of residential energy consumption. Regarding the energy rebound effect, we find that energy price is negatively correlated with the rebound effect, and an inverted U-shaped relationship between residents’ income level and rebound-effect size exists. The magnitude of the rebound effect varies across regions, with an average of 65.4%. The main policy implication generated by this study is that it should be in urgent need of energy pricing reform to mitigate the rebound effect in China.

Suggested Citation

  • Kerui Du & Shuai Shao & Zheming Yan, 2021. "Urban Residential Energy Demand and Rebound Effect in China: A Stochastic Energy Demand Frontier Approach," The Energy Journal, , vol. 42(4), pages 175-194, July.
    • Handle: RePEc:sae:enejou:v:42:y:2021:i:4:p:175-194
    DOI: 10.5547/01956574.42.4.kdu
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    More about this item

    Keywords

    Rebound effect; Energy demand; Energy efficiency; Urban residential sector; Stochastic energy demand frontier model; China;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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