Own-Price Elasticities of Electricity Demand as a Proxy for Direct Rebound Effects: A Meta-Analytical Comparison in the Northeast Asian Context

The direct rebound effect occurs when the expected decrease in energy consumption incurred by energy efficiency enhancement is partially, or at times even exceedingly, offset by an unexpected increase in energy consumption. One method used to capture its magnitude incorporates the usage of own-price elasticities of energy demand as a proxy. In this study, we explore the suitability of this approach under the context of China, Japan, and Korea for residential electricity. We synthesized the diverse estimates of the own-price elasticity of residential electricity demand and employed a meta-analysis approach to derive a representative estimate corresponding to each country. Our results show that the meta-analytical own-price elasticities of residential electricity demand are $$-0.500$$ - 0.500 for China, $$-0.645$$ - 0.645 for Japan, and $$-0.318$$ - 0.318 for Korea. Using these numbers, we conducted direct comparisons with the magnitude of direct rebound effects, and identified that the effectiveness of using own-price elasticities of electricity demand as a substitute for direct rebound effects varies depending on geographical focus, methodology, and time scale. Also, we argue that viewing estimates of the own-price elasticity of electricity demand as a ballpark estimate for the magnitude of direct rebound effects is a more appropriate approach, than as a mirror.