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The Full Impact of Energy Efficiency on Households' Energy Demand

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  • Kurt Kratena
  • Michael Wüger

    (WIFO)

Abstract

This paper deals with technical progress in the energy efficiency of US households' capital stock (appliances and passenger cars) and its potential for energy saving. An increase in the energy efficiency of households can only be achieved via a different capital stock. The link between the average energy efficiency and the stock of energy-using durables is econometrically estimated based on a new data set of household appliances and passenger cars. This relationship complements a Quadratic Almost Ideal Demand System (QUAIDS) for six consumption categories (non-durables), including heating, electricity and transport. Any increase in energy efficiency lowers the corresponding "service" price and leads to a "rebound effect". A simulation exercise shows how the ceteris paribus-rebound effect is changed by taking into account the capital costs and other interdependencies and feedbacks that can only be captured by a full model of household demand.

Suggested Citation

  • Kurt Kratena & Michael Wüger, 2010. "The Full Impact of Energy Efficiency on Households' Energy Demand," WIFO Working Papers 356, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2010:i:356
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    File URL: https://www.wifo.ac.at/wwa/pubid/38365
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    References listed on IDEAS

    as
    1. Jose Luengo-Prado, Maria, 2006. "Durables, nondurables, down payments and consumption excesses," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1509-1539, October.
    2. Sue Wing, Ian, 2006. "Representing induced technological change in models for climate policy analysis," Energy Economics, Elsevier, vol. 28(5-6), pages 539-562, November.
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    Cited by:

    1. Daniela Kletzan-Slamanig & Claudia Kettner & Angela Köppl & Ina Meyer & Franz Sinabell, 2015. "Schlüsselindikatoren zu Klimawandel und Energiewirtschaft 2015. Sonderthema: Energieeffizienz als Hebel der Dekarbonisierung," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(7), pages 593-607, July.
    2. Cécile Hediger, 2022. "Rebound effects in residential heating: How much does an extra degree matter?," IRENE Working Papers 22-05, IRENE Institute of Economic Research.
    3. Mohtar Rasyid & Anita Kristina, 2021. "Estimation of Demand System for Household Energy Consumption: Empirical Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 289-295.
    4. Moshiri, Saeed & Aliyev, Kamil, 2017. "Rebound effect of efficiency improvement in passenger cars on gasoline consumption in Canada," Ecological Economics, Elsevier, vol. 131(C), pages 330-341.
    5. Thomas, Brinda A. & Azevedo, Inês L., 2013. "Estimating direct and indirect rebound effects for U.S. households with input–output analysis Part 1: Theoretical framework," Ecological Economics, Elsevier, vol. 86(C), pages 199-210.
    6. N. N., 2015. "WIFO-Monatsberichte, Heft 7/2015," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(7), July.

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    More about this item

    Keywords

    household energy demand; embodied and induced technical change; rebound effect;
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