Rebound effect with energy efficiency determinants: a two-stage analysis of residential electricity consumption in Indonesia

Rishan Adha, Cheng-Yih Hong, M. Firmansyah and Ade Paranata

MPRA Paper from University Library of Munich, Germany

Abstract: This study aims to estimate the economy-wide rebound effect using the determinants of household energy demand in Indonesia. Identifying the size of the rebound effect is essential for the government's energy efficiency and carbon emission reduction programs. The estimation of the rebound effect uses a two-stage analysis with panel data of every province in Indonesia from 2002 to 2018. We employ the Input Demand Function of the Stochastic Frontier Analysis to measure the energy efficiency of residential aggregate in Indonesia. In the second stage, we adopt the dynamic panel data model to estimate the economy-wide rebound effect. The estimated dynamic panel data model reveals that the magnitudes of the short-run and long-run rebound effects were 87.2% and -45.5%, respectively. In other words, a 1% increase in household energy efficiency results in a reduction in energy consumption of 0.13% in the short term and 1.45% in the long term. Our research also discovers that a backfire rebound effect exists in provinces with high energy efficiency. Therefore, we prove to backfire claims that improving energy efficiency will increase energy use. Henceforth, energy efficiency programs in the household sector still need to be implemented, followed by increasing technological innovation and improving housing policy.

Keywords: Electricity demand; energy efficiency; rebound effect; stochastic frontier analysis (search for similar items in EconPapers)
JEL-codes: C23 Q41 Q43 (search for similar items in EconPapers)
Date: 2021-03-30
New Economics Papers: this item is included in nep-eff, nep-ene and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published in Sustainable Production and Consumption October 2021.28(2021): pp. 556-565

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/110444/1/MPRA_paper_110444.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:110444

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().