landlords versus tenants information asymmetry and mismatched preferences for home energy efficiency abstract new zealand homes are poorly insulated by international standards there are government subsidies available for people to improve the energy efficiency of their homes but uptake has been relatively low among owners of rental properties this paper presents the results of a choice experiment used to investigate the preferences of home owners and tenants for insulation and heating upgrades the responses indicate that landlords may underestimate how cold their rental properties are in winter considering the level of discomfort reported by tenants median willingness to pay wtp for improved insulation by landlords is only 50 70 of owner occupier values landlords are willing to pay more for a heating appliance than any other retrofit option in contrast tenants have a low wtp for the heating appliance and would prefer under floor insulation tenants express a willingness to pay higher rent in exchange for improved energy efficiency at a rate that would appear to make such upgrades economic for the landlord information asymmetry and lack of appropriate market signals may be a large part of the reason why many landlords are not willing to pay market prices for energy efficiency upgrades

feebates rebates and gas guzzler taxes a study of incentives for increased fuel economy abstract us fuel economy standards have not been changed significantly in 20 years feebates are a market based alternative in which vehicles with fuel consumption rates above a pivot point are charged fees while vehicles below receive rebates by choice of pivot points feebate systems can be made revenue neutral feebates have been analyzed before this study re examines feebates using recent data assesses how the undervaluing of fuel economy by consumers might affect their efficacy tests sensitivity to the cost of fuel economy technology and price elasticities of vehicle demand and adds assessments of gas guzzler taxes or rebates alone a feebate rate of 500 per 0 01 gallon per mile gpm produces a 16 percent increase in fuel economy while a 1000 per 0 01 gpm results in a 29 percent increase even if consumers count only the first 3 years of fuel savings unit sales decline by about 0 5 percent but sales revenues increase because the added value of fuel economy technologies outweighs the decrease in sales in all cases the vast majority of fuel economy increase is due to adoption of fuel economy technologies rather than shifts in sales

household electricity demand revisited respond to price changes this paper develops a model for evaluating the effects of alternative tariff designs on electricity use the model concurrently addresses several interrelated difficulties posed by nonlinear pricing heterogeneity in consumer price sensitivity and consumption aggregation over appliances and time we estimate the model using extensive data for a representative sample of 1300 california households the results imply a strikingly skewed distribution of household electricity price elasticities in the population with a small fraction of households accounting for most aggregate demand response we then estimate the aggregate and distributional consequences of recent tariff structure changes recent efforts to restructure electricity markets have renewed interest in electricity demand and pricing this interest reflects a broad desire to improve the efficiency of electricity markets and policy makers concerns over the impact of price changes on consumers how new pricing mechanisms would affect households consumption and expenditures is a matter of considerable uncertainty however this uncertainty has provoked controversy and debate in the regulatory policy arena hampering market reforms using econometric methods to assess the effects of electricity price changes presents several challenges these include the nonlinear structure of tariff schedules aggregation of metered consumption behaviour over time and appliances and the interdependence of energy use with longer term household decisions over appliance ownership and dwelling characteristics the first two issues introduce complex simultaneity problems between marginal prices and consumption the third issue imposes high data requirements information on household specific appliance holdings and residence features and creates heterogeneity in consumption responses related to the characteristics of these durable goods when the researcher s objective is to develop a model for simulating the effects of prospective tariff changes ignoring these issues will provide an incomplete assessment of demand responses and potentially misleading predictions of a new tariff s consumption and revenue consequences in this paper we estimate a model of household electricity demand that can be used

reforming residential electricity tariff in china block tariffs pricing approach the chinese households that make up approximately a quarter of world households are facing a residential power tariff reform in which a rising block tariff structure will be implemented and this tariff mechanism is widely used around the world the basic principle of the structure is to assign a higher price for higher income consumers with low price elasticity of power demand to capture the non linear effects of price and income on elasticities we set up a translog demand model the empirical findings indicate that the higher income consumers are less sensitive than those with lower income to price changes we further put forward three proposals of chinese residential electricity tariffs compared to a flat tariff the reasonable block tariff structure generates more efficient allocation of cross subsidies better incentives for raising the efficiency of electricity usage and reducing emissions from power generation which also supports the living standards of low income households

does the energy efficiency paradox exist technological progress and uncertainty we explain why firms may choose not to undertake investments inenergy saving technologies that appear profitable from a net presentvalue perspective as future technological advances are inherentlyuncertain and investments in new technology are at least partly irreversible it may pay to postpone investments in energy savingand wait for the arrival of improved varieties this insight casts doubton the existence of so called low hanging fruits in energy saving although we do not wish to deny that organisational failures may alsobe important failure to appreciate the underlying stochasticity oftechnological progress may obscure the insight that there is value inwaiting and costs involved in terminating the option to invest theappetite for low hanging fruits will be less when these costs areincorporated in the analysis we demonstrate that the effect of thearrival rate of new technologies on the adoption lag for a rational firmis ambiguous the same holds for the effect of the expected jump inefficiency of new technologies government policies aimed at enhancingthe adoption of new technologies through stimulation of r d maytherefore be counterproductive

are environmental fiscal incentives effective in inducing energy saving renovations an econometric evaluation of the french energy tax credit abstract fiscal incentives have been introduced to encourage households in many countries to undertake energy saving renovations this paper assesses the impact of an energy tax credit on i renovation rate and ii renovation expenditures using french data we exploit a sharp discontinuity corresponding to the introduction of the french tax credit in 2005 to identify the policy s effects results indicate that the tax credit has little effect on the decision to renovate increasing renovations by 1 09 ceteris paribus we find that the presence of free riding reduces the actual effect of fiscal measures however this fiscal policy does lead to an increase in renovation expenditures by 21 76 all things being equal this suggests that the energy tax credit induces households who are already determined to renovate to perform more substantial energy saving renovations we conduct a robustness check using the matching method which confirms our results

the welfare effects of different pricing schemes for electricity distribution in finland the main components of electricity prices can be divided into the wholesale price the price of network operations and taxes even if the wholesale price is determined efficiently total welfare can be significantly disturbed if network operations are priced inefficiently in this study we calculate network prices based on four alternative methods these are marginal cost pricing ramsey pricing fdc pricing and optimal two part tariffs the welfare effects on the prevailing pricing system are compared we show that potentially significant improvements in welfare can be achieved by using marginal cost prices or optimal two part tariffs also ramsey pricing indicates that prevailing prices are inefficient

energy saving in energy market reform the feed in tariffs option abstract the use of feed in tariffs fits is now widespread for renewable energy and under discussion for other low carbon electricity generation but not for energy efficiency there is a small literature on fits for electricity demand reduction but not energy efficiency more generally this paper considers the general application of fits on the demand side and sets out the economic arguments in the context of changing energy markets it then discusses the implications of some practical issues including the definitional problems arising from the difference between energy efficiency and demand reduction using experience from historical energy efficiency programmes it considers the public benefits payment methods and policy scope that need to be considered and how these might affect policy design it makes some provisional estimates of economically justified payments in the context of the proposed uk energy market reform it concludes that fits for energy saving might be a powerful tool for incentivising energy efficiency

estimates of energy subsidies in china and impact of energy subsidy reform abstract for a transitional economy such as china some energy subsidies are reasonable and sometimes even necessary for achieving social goals however with rising energy prices and environmental concerns we see conflicts emerging between energy subsidies energy demand supply fundamentals and climate change considerations energy subsidies have important implications for sustainable development through their effects on energy use efficiency and the choice of fuel source this paper applies the price gap approach to estimate china s energy subsidies results indicate that china s energy subsidies amounted to cny 356 73 billion in 2007 equivalent to 1 43 of gdp subsidies for oil products consumption are the largest followed by subsidies for the electricity and coal sectors furthermore a cge model is used to analyze the economic impacts of energy subsidy reforms our findings show that removing energy subsidies will result in a significant fall in energy demand and emissions but will have negative impacts on macroeconomic variables we conclude that offsetting policies could be adopted such that certain shares of these subsidies are reallocated to support other sustainable development measures which could lead to reducing energy intensity and favoring the environment

tariff structure of japanese electric power companies an empirical analysis using dea this research explores a marginal cost mc based pricing system using data envelopment analysis dea this dea technique is widely applied for performance analysis and efficiency measurement in public and private sectors this article does not follow such a previous research direction rather directing itself towards the new measurement of mc and ramsey prices of multiple electric power services as an important case study this research applies the proposed dea approach to examine how much the current tariffs of japanese electric power services deviate from these mc and ramsey prices this type of research has never been explored in japan even though such a research effort is needed by many policy makers and consumers it is hoped that our empirical findings can serve as a policy making basis for guiding the japanese electric power industry this study believes that this japanese experience is useful for other nations such as asia pacific countries where many public industries are regulated by their governments

household energy use applying behavioural economics to understand consumer decision making and behaviour household energy conservation has emerged as a major challenge and opportunity for researchers practitioners and policymakers consumers also seem to be gaining greater awareness of the value and need for sustainable energy practices particularly amid growing public concerns over greenhouse gas emissions and climate change yet even with adequate knowledge of how to save energy and a professed desire to do so many consumers still fail to take noticeable steps towards energy efficiency and conservation there is often a sizeable discrepancy between peoples self reported knowledge values attitudes and intentions and their observable behaviour examples include the well known knowledge action gap and value action gap but neither is household energy consumption driven primarily by financial incentives and the rational pursuit of material interests in fact people sometimes respond in unexpected and undesirable ways to rewards and sanctions intended to shift consumers cost benefit calculus in favour of sustainable behaviours why is this so why is household energy consumption and conservation difficult to predict from either core values or material interests by drawing on critical insights from behavioural economics and psychology we illuminate the key cognitive biases and motivational factors that may explain why energy related behaviour so often fails to align with either the personal values or material interests of consumers understanding these psychological phenomena can make household and community responses to public policy interventions less surprising and in parallel can help us design more cost effective and mass scalable behavioural solutions to encourage renewable and sustainable energy use among consumers

perceived price complexity of dynamic energy tariffs an investigation of antecedents and consequences dynamic tariffs have the potential to contribute to a successful shift from conventional to renewable energies but tapping this potential in europe ultimately depends on residential consumers selecting them this study proposes and finds that consumer reactions to dynamic tariffs depend on the level of perceived price complexity that represents the cognitive effort consumers must engage in to compute the overall bill amount an online experiment conducted with a representative sample of 664 german residential energy consumers examines how salient characteristics of dynamic tariffs contribute to perceived price complexity subsequently a structural equation model sem reveals that the depth of information processing is central to understand how price complexity relates to consumers behavioral intentions the results suggest that it will be challenging to convince european consumers to select complex dynamic tariffs under the current legal framework policymakers will need to find ways to make these tariffs more attractive

recent experiences with tariffs for saving electricity in households abstract financial incentives or disincentives in the form of electricity tariffs can be used to encourage energy efficiency in this paper two simple tariffs aimed at residential consumers are reviewed progressive tariffs pts which penalise high consumption of electricity and electricity saving feed in tariffs esfits which provide incentives to reduce consumption of electricity the effectiveness of these tariffs is quantified and compared using the price elasticity for pt and an incentive elasticity for esfit the results indicate that pts are more effective in mobilising electricity saving than esfits and confirm biases in human decision making here loss aversion while further research is necessary we propose a tariff which would motivate consumers to reduce their consumption by offering both an incentive for reaching an energy saving goal and a disincentive for failing to reach this goal the flexibility of such a tariff makes it a promising solution suitable for application in countries with a comparatively high household income and liberalised retail electricity market

interest rates income and home improvement decisions abstract the demand for additional housing is modeled demonstrating that higher interest rates make home improvements more attractive relative to moving when homeowners hold fixed rate mortgages technological constraints on home improvements make improving less attractive relative to moving when incomes have risen empirical evidence using cross sectional data is presented suggesting that the probability of making home improvements is positively related to increases in the current interest rate and negatively related to increases in income an explanation is offered for the recent rise in home improvement expenditures in the face of slower economic growth and higher mortgage interest rates

designation and influence of household increasing block electricity tariffs in china abstract electricity is the guarantee of normal life and the electricity price is widely concerned as a developing country in the transition stage abundant policy implications are included in the electricity price in china thus whether to adjust the resident electricity price is a dilemma for the government however the current single tariff system cannot cope with the complex social and environmental problems a new price mechanism is indeed needed this paper tries to design an increasing block tariffs system with the consideration of residential income and electricity consumption the result indicates that the increasing block tariffs system with four tier structure is more reasonable for china although the increasing block tariffs will result in the increase of electricity price it is still acceptable and affordable the increasing block tariffs will greatly improve the equity and efficiency and promote the electricity saving and emissions reduction moreover the power companies will increase tariffs revenue which would use to the transmission networks investment in poor area in order to the offset the limitations of the increasing block tariffs the government should adopt some complementary measures

the optimality of boiteux ramsey pricing consider an economy with one public enterprise that is subject to a budgetary constraint and charges prices according to the first order necessary conditions suggested by boiteux 1956 or in another context by ramsey 1972 we state restrictive conditions sufficient to ensure that the resulting allocation is second best author s abstract

short and long run elasticities in us residential electricity demand a co integration approach abstract co integration techniques show promise in the analysis of short and long run effects of economic variables on energy use we use these techniques to develop an error correction model of annual us residential electricity demand we construct equipment stock indices and estimate the model for 1949 1993 our analysis suggests a structural shift in consumption during the 1960s we discuss reasons for this shift report the short and long run elasticities provide forecasts for 1994 1995 and compare the model s forecasts with other published forecasts

differing patterns of industrial dynamics new zealand ohio and sweden 1978 1994 new zealand ohio and sweden have experienced sharply divergent macroeconomic developments since the early 1970s during the 1980s new zealand went from being the most heavily regulated and protectionist oecd country to one of the least regulated and most open economies in the world ohio suffered severe economic downturns when its major industries steel automobiles and machinery went through devastating crises since then a major restructuring has taken place and manufacturing output exports and employment have generally grown faster than in the united states as a whole sweden had an outstanding industrial growth record for several decades until the mid 1970s but then suffered economic setbacks from which it has not yet fully recovered industrial output declined for several years resumed growth in the early 1980s but then stagnated again in the early 1990s

free riding on tax credits for home insulation in france an econometric assessment using panel data abstract this econometric study assesses the efficiency of the income tax credit system introduced in france in 2005 on investment decisions for household retrofits focusing on insulation measures a logit model with random individual effects is estimated using an unbalanced panel of 23 879 households surveyed over the period 2002 2011 an estimation in difference is performed to identify the impact of the policy the tax credit is found to have had no significant effect during the first two years suggesting a latency period related to inertia in households investment decisions possibly due to the complexity of the tax credit scheme the tax credit had an increasing significant positive effect from 2007 to 2010 before slightly decreasing in 2011 this is in line with changes in the tax credit rates suggesting a correlation with the level of subsidy defined as the situation in which the subsidized household would have invested even in the absence of the subsidy free ridership progressively decreased over the period was lower for insulation of opaque surfaces roofs walls etc than for insulation of windows and depended on individual characteristics the estimated average proportion of free riders varies between 40 and 85 after 2006 in addition we assess the potential bias caused by time varying unobservable variables and conclude that our estimates of the impacts of the policy are conservative

china s energy demand and its characteristics in the industrialization and urbanization process a reply zhang and qin 2013 argued that in jiang and lin 2012 the equation form and variable selection should be altered and it was problematic to use regression equation to project the future in this reply we disagree with and will refute some of the points raised in their comments the model that we established was based on the mature economic theory with the variable selections all having economic implications considering the economic development stage china s urbanization will speed up and this will have significant effect on energy consumption therefore urbanization is an indispensable variable for analyzing energy demand in china the scenario design only in terms of the gdp is sufficient for illustrating energy demand trend in china to be understood in a way by most of the people although energy forecast is not that precise it has an important implication for energy policy design especially for china which is in transition and china s energy demand will keep high growth in the mid term

productivity growth and deregulation of japanese electricity distribution deregulation of japanese electric power industry began in 1995 after the amendment of electricity utility industry law in 1995 competition was partially introduced in a generation sector and retail competition started from 2000 eligibility to choose suppliers was gradually extended from larger to smaller customers as of 2008 almost all customers except households can choose their electricity suppliers based upon both previous implementation result of competition policy and review on their achievement japanese government will begin new policy debate in 2013 to assess further retail competition which includes household customers to prepare for policy suggestion on the future electric power industry this study examines the cost structure of japanese electricity distribution for the purpose we estimate a multi product translog cost function of japanese electricity distribution from 1983 to 2003 using the estimated cost function we calculate several economic measures such as productivity growth technical change and economies of scale and scope the empirical results of this study indicate the improvement in productivity growth after deregulation

consumer responses towards home energy financial incentives a survey based study abstract residential energy efficient and renewable energy eere products play an important role in energy conservation and carbon emissions reduction various financial incentive programs have been developed to promote the adoption of these products however their effectiveness in attracting consumers is not very well understood in this study we investigated impacts of financial incentives on homeowner s decision making towards six eere products two forms of incentives tax credits and interest free loans were examined through a household mailing survey in florida the united states results showed that although half of the respondents were interested in eere products the high investment cost was a major concern that hindered their purchase activities homeowners were attracted to financial incentives and valued tax credits much higher than interest free loans the current federal home energy tax credit levels were found to attract only 2 12 percent of homeowners to buy eere products the willingness of participation was especially low for the costly products such as solar panels the participation rate was also very low for lower income i e annual household income below 50 000 families living in older residences this study contributes to the understanding of economic and social aspects of consumer decision making on energy efficiency and alternative energy

how high are option values in energy efficiency investments high implicit discount rates in consumers energy efficiency investments have long been a source of controversy in several recent papers hassett and metcalf argue that the uncertainty and irreversibility attendant to such investments and the resulting option value account for this anomalously high implicit discounting using their model and data we show that to the contrary their analysis falls well short of providing an explanation of this pattern

estimation of urban residential electricity demand in china using household survey data abstract this paper uses annual urban household survey data of sichuan province from 2007 to 2009 to estimate the income and price elasticities of residential electricity demand along with the effects of lifestyle related variables the empirical results show that in the urban area of sichuan province the residential electricity demand is price and income inelastic with price and income elasticities ranging from 0 35 to 0 50 and from 0 14 to 0 33 respectively such lifestyle related variables as demographic variables dwelling size and holdings of home appliances are also important determinants of residential electricity demand especially the latter these results are robust to a variety of sensitivity tests the research findings imply that urban residential electricity demand continues to increase with the growth of income the empirical results have important policy implications for the multistep electricity price which been adopted in some cities and is expected to be promoted nationwide through the installation of energy efficient home appliances

energy tax credits and residential conservation investment evidence from panel data using panel data on individual tax returns and variation in state tax policy we measure the impact of government tax policies to encourage residential conservation investment on the probability of making these investments unlike previous work we account for unobserved heterogeneity in tastes for energy saving activities and its possible correlation with tax policy at the state level we find that controlling for unobserved heterogeneity is very important based on our preferred point estimate of the tax price coefficient a 10 percentage point change in the tax price for energy investment would lead to a 24 percent increase in the probability of making an investment

industrial electricity demand for turkey a structural time series analysis abstract this research investigates the relationship between turkish industrial electricity consumption industrial value added and electricity prices in order to forecast future turkish industrial electricity demand to achieve this an industrial electricity demand function for turkey is estimated by applying the structural time series technique to annual data over the period 1960 to 2008 in addition to identifying the size and significance of the price and industrial value added output elasticities this technique also uncovers the electricity underlying energy demand trend uedt for the turkish industrial sector and is as far as is known the first attempt to do this the results suggest that output and real electricity prices and a uedt all have an important role to play in driving turkish industrial electricity demand consequently they should all be incorporated when modelling turkish industrial electricity demand and the estimated uedt should arguably be considered in future energy policy decisions concerning the turkish electricity industry the output and price elasticities are estimated to be 0 15 and 0 16 respectively with an increasing but at a decreasing rate uedt and based on the estimated equation and different forecast assumptions it is predicted that turkish industrial electricity demand will be somewhere between 97 and 148 twh by 2020

one for all the impact of different types of energy feedback and goal setting on individuals motivation to conserve electricity abstract we investigate how different types of energy feedback combined with goal setting impact on consumers motivation to conserve electricity using an online survey we test the influence of energy feedback in physical units kwh monetary values eur and environmental values avoided co2 emissions we asked participants to set themselves either a high low or no energy conservation goal in addition we assess the respondents value types hedonic egoistic altruistic and biospheric to test predictions derived from goal framing theory in general individuals scoring high on biospheric values were more motivated to conserve electricity and their motivation did not increase in response to setting an energy conservation goal individuals with egoistic values seem less willing to reduce their electricity consumption unless in the monetary feedback or high goal conditions a high conservation goal was only found to be effective in combination with monetary feedback it increased the motivation to save electricity by 6 7 percentage points in comparison to the low goal condition and 6 6 percentage points in comparison to the control condition

an agent based approach with collaboration among agents estimation of wholesale electricity price on pjm and artificial data generated by a mean reverting model abstract this study examines the performance of mais multi agent intelligent simulator equipped with various learning capabilities in addition to the learning capabilities the proposed mais incorporates collaboration among agents the proposed mais is applied to estimate a dynamic change of wholesale electricity price in pjm pennsylvania new jersey mainland and an artificial data set generated by a mean reverting model using such different types of data sets the methodological validity of mais is confirmed by comparing it with other well known alternatives in computer science this study finds that the mais needs to incorporate both the mean reverting model and the collaboration behavior among agents in order to enhance its estimation capability the mais discussed in this study will provide research on energy economics with a new numerical capability that can investigate a dynamic change of not only wholesale electricity price but also speculation and learning process of traders

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

estimation of japanese price elasticities of residential electricity demand 1990 2007 abstract this paper estimates elasticities of japanese residential price electricity from 1990 to 2007 the first difference generalized method of moment estimator is employed to avoid dynamic panel bias which is not considered in most previous studies the results show that while short run elasticities are similar to those in previous studies long run elasticities are significantly lower in our study we also find that the price elasticity of japanese residential electricity consumption is notably affected by income inequality and severe weather based on these results we provide some insights to tailor environmental taxation so as to effectively attain the kyoto protocol