Endogenous energy efficiency and residential energy consumption in the presence of health and education choices

Xavier Pautrel

Working Papers from HAL

Abstract: This short article studies the link between energy efficiency and residential energy consumption from a theoretical point of view, accounting for the empirical evidence that education outcomes are positively influenced by health, and that low energy efficiency reduces health status. An overlapping-generation model with heterogenous agents is built, in which education, health and energy efficiency choices are endogenous. Firstly, this model replicates the well-documented positive relationship between energy efficiency and income level. Secondly, it replicates the positive link between the aggregate energy efficiency index (defined as the weighted sum of the individual energy efficiencies chosen) and aggregate energy consumption, founded in the empirical literature, offering a possible explanation of the rebound effect based on health and educational dimensions. Thirdly, it shows that a greater level of energy efficiency chosen by individuals reduces wage inequality between skilled and unskilled workers.

Keywords: Energy efficiency Rebound effect Residential energy consumption Health Education Overlapping generations model. JEL classification D58 Q43; Energy efficiency; Rebound effect; Residential energy consumption; Health; Education; Overlapping generations model. JEL classification D58; Q43 (search for similar items in EconPapers)
Date: 2025-09-16
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