Explaining electricity demand and the role of energy and investment literacy on end-use efficiency of Swiss households

J.E. Blasch, Massimo Filippini, Nina Boogen, Nilkanth Kumar

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

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.
Original languageEnglish
Pages (from-to)89-102
Number of pages14
JournalEnergy Economics
Volume68
Issue number1
DOIs
Publication statusPublished - 2017

Funding

We are grateful to the Bundesamt für Energie (BFE) for the financial support. BFE was not responsible for the study design, the collection, analysis and interpretation of data or in the writing of this paper. The content does not necessarily represent the official views of BFE. This research is also part of the activities of SCCER CREST, which is financially supported by the Swiss Commission for Technology and Innovation (CTI). All omissions and remaining errors are our responsibility. Furthermore, we would like to thank all the cooperating utilities who sent out invitations to participate in the household survey. Comments from two anonymous referees as well as from participants of the 2016 Atlantic Workshop on Energy and Environmental Economics (AWEEE), the 2017 European Workshop on Efficiency and Productivity Analysis (EWEPA), and the 2017 Annual Conference of the European Association of Environmental and Resource Economists (EAERE) are gratefully acknowledged.

FundersFunder number
SCCER CREST
Kommission für Technologie und Innovation
Bundesamt für Energie
European Association of Environmental and Resource Economists

    Keywords

    • Residential electricity demand
    • Stochastic frontier analysis
    • Transient and persistent efficiency
    • ; Energy literacy
    • Investment literacy

    Fingerprint

    Dive into the research topics of 'Explaining electricity demand and the role of energy and investment literacy on end-use efficiency of Swiss households'. Together they form a unique fingerprint.

    Cite this