Energy Hogs and Energy Angels: What Does Residential Electricity Use Really Tell Us about Profligate Consumption?

Severin Borenstein

AEA Papers and Proceedings, 2025, vol. 115, 357-62

Abstract: High residential volumetric electricity prices are partially justified as placing more of the cost burden on less prudent households, so-called "energy hogs." I show that the difference in means between above-median and below-median household consumption declines by 60–90 percent after adjusting for three factors: number of household occupants, local climate variation, and adoption of rooftop solar. Failure to make these adjustments disproportionately hurts low-income households. Focusing on residential electricity is especially problematic because nationally it accounts for less than 15 percent of energy and less than 10 percent of greenhouse gas emissions, while such penalty pricing is virtually nonexistent elsewhere in the economy.

JEL-codes: D12 L94 L98 Q41 Q48 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/pandp.20251111

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