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Energy Consumption in the French Residential Sector: How Much Do Individual Preferences Matter?

Salome Bakaloglou and Dorothée Charlier ()

Working Papers from Chaire Economie du climat

Abstract: The aim of this research is to understand the weight of preference heterogeneity in explaining energy consumption in French homes. Using a discrete-continuous model and the conditional mixed-process estimator (CMP) allows us to tackle two potential endogeneities in residential energy consumption: energy prices and the choice of equipment. As a major contribution, we provide evidence that preferences for comfort over energy savings do have significant direct and indirect impacts on energy consumption, especially for high-income households. Preferring comfort over economy or one additional degree of heating implies an average energy overconsumption of 10% and 7.8% respectively, up to 36% for high-income households. Our results strengthen the belief that household heterogeneity is a substantial factor in explaining energy consumption and could have meaningful implications for the design of public policy tools aimed at reducing energy consumption in the residential sector.

Keywords: Residential energy consumption; Household preferences; Discrete-continuous choice; Conditional mixed-process (search for similar items in EconPapers)
JEL-codes: Q41 D12 C26 C21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene
Date: 2018
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