The role of energy and investment literacy for residential electricity demand and end-use efficiency

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

Research output: Working paperAcademic

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 1, 994 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 improve efficiency in the use of energy within households.
Original languageEnglish
Place of PublicationZurich
PublisherCER-ETH – Center of Economic Research at ETH Zurich
Volume17/269
Publication statusPublished - 24 Mar 2017

Publication series

NameCER-ETH Economics Working Paper Series
PublisherCER-ETH – Center of Economic Research at ETH Zurich
No.269
Volume17

Keywords

  • Stochastic frontier analysis
  • Transient and persistent efficiency
  • Energy literacy
  • Investment literacy
  • Energy saving behaviour
  • Residential electricity demand
  • Household data

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  • Cite this

    Blasch, J. E., Boogen, N., Filippini, M., & Kumar, N. (2017). The role of energy and investment literacy for residential electricity demand and end-use efficiency. (CER-ETH Economics Working Paper Series; Vol. 17, No. 269). Zurich: CER-ETH – Center of Economic Research at ETH Zurich.