Energy Demand for Heating: Short Run and Long Run

Michael Hanemann (), Xavier Labandeira () and Jose Labeaga
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Xavier Labandeira: Rede (Universidade de Vigo) and Economics for Energy

Working Papers from Economics for Energy

Abstract: Residential energy consumption, mostly due to residential heating, is a large component of energy demand in developed countries and thus a target for public policies aimed at reducing negative environmental effects and energy dependence. This paper uses Spanish household micro data to estimate a discrete-continuous model of residential energy demand for heating covering both the choice of energy source and the amount of energy used for heating. Relative fuel prices for heating influence the discrete decision on the type of energy source as a long-run effect. The short-run demand response to energy price changes is found to be limited but variable across the different energy sources for heating in Spain. Moreover, household demand responses consistently differ across rich and poor regions. A simple policy simulation illustrates the practical relevance of this empirical approach.

Keywords: environment; energy; security; discrete; continuous; choice; taxes; prices (search for similar items in EconPapers)
JEL-codes: C13 C14 C23 Q41 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2013-04
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Citations: View citations in EconPapers (9)

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