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Rebound effects of behavioural efficiency improvements in households' energy services consumption in the presence of demand rigidities and habits

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  • Baikowski, Martin
  • Koesler, Simon

Abstract

Changes in energy consumption behaviour of households are recognised as a main contributor to reduced energy demand in developed countries. We investigate the economy-wide impacts of a more efficient electricity consumption behaviour in the presence of demand rigidities and consumption habits. Our findings demonstrate that in the context of energy efficiency improvements in households, taking into account rebound effects is vital, as rebound effects can drastically reduce expected energy savings. We further point out that policies aimed at reducing household energy consumption should always take demand rigidities and consumption habits into account, otherwise rebound effects could be significantly underestimated.

Suggested Citation

  • Baikowski, Martin & Koesler, Simon, 2020. "Rebound effects of behavioural efficiency improvements in households' energy services consumption in the presence of demand rigidities and habits," CAWM Discussion Papers 120, University of Münster, Münster Center for Economic Policy (MEP).
    • Handle: RePEc:zbw:cawmdp:120
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    References listed on IDEAS

    as
    1. Nathan W. Chan & Kenneth Gillingham, 2015. "The Microeconomic Theory of the Rebound Effect and Its Welfare Implications," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(1), pages 133-159.
    2. Baikowski, Martin, 2018. "Impacts of consumers' electricity price misperceptions," CAWM Discussion Papers 105, University of Münster, Münster Center for Economic Policy (MEP).
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    More about this item

    Keywords

    rebound; demand rigidities; energy service consumption; consumption habits;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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