TY - JOUR
T1 - Explaining electricity demand and the role of energy and investment literacy on end-use efficiency of Swiss households
AU - Blasch, J.E.
AU - Filippini, Massimo
AU - Boogen, Nina
AU - Kumar, Nilkanth
PY - 2017
Y1 - 2017
N2 - This paper estimates the level of transient and persistent efficiency in the use of electricity in Swiss households using the newly developed generalized true random effects model (GTREM). An unbalanced panel dataset of 1994 Swiss households from 2010 to 2014 collected via a household survey is used to estimate an electricity demand frontier function. We further investigate whether energy and investment literacy have an influence on the household electricity consumption. The results show significant inefficiencies in the use of electricity among Swiss households, both transient (11%) and persistent (22%). We note that the high persistent inefficiency is indicative of structural problems faced by households and systematic behavioral shortcomings in residential electricity consumption. These results indicate a considerable potential for electricity savings and thus reaching the reduction targets defined by the Swiss federal council as part of the Energy Strategy 2050, wherein end-use efficiency improvement is one of the main pillars. The results support a positive role of energy and, in particular, investment literacy in reducing household electricity consumption. Policies targeting an improvement of these attributes could help to enhance efficiency in the use of energy within households.
AB - This paper estimates the level of transient and persistent efficiency in the use of electricity in Swiss households using the newly developed generalized true random effects model (GTREM). An unbalanced panel dataset of 1994 Swiss households from 2010 to 2014 collected via a household survey is used to estimate an electricity demand frontier function. We further investigate whether energy and investment literacy have an influence on the household electricity consumption. The results show significant inefficiencies in the use of electricity among Swiss households, both transient (11%) and persistent (22%). We note that the high persistent inefficiency is indicative of structural problems faced by households and systematic behavioral shortcomings in residential electricity consumption. These results indicate a considerable potential for electricity savings and thus reaching the reduction targets defined by the Swiss federal council as part of the Energy Strategy 2050, wherein end-use efficiency improvement is one of the main pillars. The results support a positive role of energy and, in particular, investment literacy in reducing household electricity consumption. Policies targeting an improvement of these attributes could help to enhance efficiency in the use of energy within households.
KW - Residential electricity demand
KW - Stochastic frontier analysis
KW - Transient and persistent efficiency
KW - ; Energy literacy
KW - Investment literacy
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U2 - 10.1016/j.eneco.2017.12.004
DO - 10.1016/j.eneco.2017.12.004
M3 - Article
SN - 0140-9883
VL - 68
SP - 89
EP - 102
JO - Energy Economics
JF - Energy Economics
IS - 1
ER -