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

Julia Blasch, Nina Boogen, Massimo Filippini and Nilkanth Kumar

Energy Economics, 2017, vol. 68, issue S1, 89-102

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.

Keywords: Stochastic frontier analysis; Transient and persistent efficiency; Residential electricity demand; Energy literacy; Investment literacy (search for similar items in EconPapers)
JEL-codes: D12 D13 D80 Q41 Q48 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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Working Paper: The role of energy and investment literacy for residential electricity demand and end-use efficiency (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:68:y:2017:i:s1:p:89-102

DOI: 10.1016/j.eneco.2017.12.004

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