The Effect of Economic Factors and Energy Efficiency Programs on Residential Electricity Consumption
Many countries have implemented policies to correct market and behavioral failures that lead to inefficient energy use. It is important to know what factors and policies can effectively overcome such failures and improve energy efficiency; however, a comprehensive analysis has been difficult because of data limitations. Using state scores compiled by American organizations recently, and adopting fixed-effects regression models, I analyze the joint impacts of relevant factors and policy programs on residential electricity consumption in each U.S. state. The empirical results reveal that increases in electricity price have small and negative effects, and increases in personal income have positive effects on residential electricity sales per capita (a measure of energy efficiency). The results suggest that it may take time for economic factors to affect electricity sales. The effects of personal income suggest the difficulty of controlling residential electricity consumption; however, they also imply that there is some room in households to reduce electricity use. The study also finds that programs and budgets of several policies seem to be associated with electricity sales. The estimates from a model including interaction terms suggest the importance of including multiple policies when analyzing and designing policies to address electricity efficiency. The results also imply the possibility of rebound effects of some policies, whereby improvements in energy efficiency lead to increases in energy consumption due to the associated lower per unit cost. Future studies should analyze both short-term and long-term effects of economic factors and policies, based on improved and accumulated time series and panel data, in order to design more effective policies for improving residential electricity efficiency.
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Efficiency, Renewables, and the Effect of Energy Policy Interactions on Residential Electricity Consumption in the United States Johnson, Robert A. (Georgetown University, 2012)This paper examines whether the combination of different energy policies yields interaction effects that influence the impact had by any single policy on its outcome of interest. In particular, this study examines whether ...