A new approach to measuring the rebound effect associated to energy efficiency improvements: An application to the US residential energy demand
Luis Orea (),
Manuel Llorca () and
Massimo Filippini ()
Energy Economics, 2015, vol. 49, issue C, 599-609
This paper brings attention to the fact that the energy demand frontier model introduced by Filippini and Hunt (2011, 2012) is closely connected to the measurement of the so-called rebound effect associated with improvements in energy efficiency. In particular, we show that their model implicitly imposes a zero rebound effect, which contradicts most of the available empirical evidence on this issue. We relax this restrictive assumption through the modelling of a rebound-effect function that mitigates or intensifies the effect of an efficiency improvement on energy consumption. We illustrate our model with an empirical application that aims to estimate a US frontier residential aggregate energy demand function using panel data for 48 states over the period 1995 to 2011. Average values of the rebound effect in the range of 56–80% are found. Therefore, policymakers should be aware that most of the expected energy reduction from efficiency improvements may not be achieved.
Keywords: US residential energy demand; Efficiency and frontier analysis; State energy efficiency; Rebound effect (search for similar items in EconPapers)
JEL-codes: C5 Q4 Q5 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:49:y:2015:i:c:p:599-609
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