A new approach to measuring the rebound effect associated to energy efficiency improvements: An application to the US residential energy demand

Orea, L.; Llorca, M.; Filippini, M.

doi:10.1016/j.eneco.2015.03.016

A new approach to measuring the rebound effect associated to energy efficiency improvements: An application to the US residential energy demand

Orea, L.; Llorca, M.; Filippini, M.

Authors

L. Orea

M. Llorca

M. Filippini

Abstract

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.

Citation

Orea, L., Llorca, M., & Filippini, M. (2015). A new approach to measuring the rebound effect associated to energy efficiency improvements: An application to the US residential energy demand. Energy Economics, 49, 599-609. https://doi.org/10.1016/j.eneco.2015.03.016

Journal Article Type	Article
Acceptance Date	Mar 21, 2015
Online Publication Date	Apr 1, 2015
Publication Date	May 1, 2015
Deposit Date	May 18, 2015
Publicly Available Date	Oct 1, 2016
Journal	Energy Economics
Print ISSN	0140-9883
Electronic ISSN	1873-6181
Publisher	Elsevier
Peer Reviewed	Peer Reviewed
Volume	49
Pages	599-609
DOI	https://doi.org/10.1016/j.eneco.2015.03.016
Keywords	US residential energy demand, Efficiency and frontier analysis, State energy efficiency, Rebound effect.
Public URL	https://durham-repository.worktribe.com/output/1405425

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Copyright Statement
NOTICE: this is the author’s version of a work that was accepted for publication in Energy Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Energy Economics, 49, May 2015, 10.1016/j.eneco.2015.03.016.