key: cord-0070571-ej8ht0d4
authors: Matsumoto, Shigeru; Mizobuchi, Kenichi; Managi, Shunsuke
title: Household energy consumption
date: 2021-11-29
journal: Environ Econ Policy Stud
DOI: 10.1007/s10018-021-00331-9
sha: db1ba896a6593e70496f20a2aaf60273af7b37f1
doc_id: 70571
cord_uid: ej8ht0d4

nan

less CO 2 , preferably renewable energy. Governments attempt to influence household energy choices by changing the relative price of energy through carbon pricing schemes. Governments can reduce household energy consumption by making households choose energy-efficient products at the product purchase stage. For the last several decades, the government has attempted to design programs that effectively provide consumers with information on the energy usage of products and, in certain circumstances, has provided subsidies to consumers who purchase energyefficient products. The total amount of energy consumed is determined by how households use the product. The objective of the conservation measures at the final energy consumption stage is to make households use the products in an energy-efficient manner. For this purpose, the government has launched various energy conservation promotion campaigns or educational programs.

This special issue includes five articles that offer useful information on the design of energy conservation measures in the residential sector.

The first two articles focus on energy savings at the product purchase stage. Even when obvious energy-saving benefits can be expected, some consumers do not purchase energy-efficient appliances. Product-choice behavior by such people cannot be fully described with a simple economic model that presupposes a rational economic man. In recent years, studies have been actively conducted to evaluate the product selection of energy-consuming products more precisely by incorporating knowledge from psychology and sociology into traditional economic models. However, most previous studies have been conducted in developed countries, mainly in Europe and the United States, and there is a lack of studies in other regions. Zainudin, Lau, and Munusami studied Malaysian consumers' purchasing behavior of energy-consuming products based on the framework of consumer behavior science. Their empirical findings reveal that consumers' perceived value is a major factor affecting buying intention. Their findings suggest that programs that enhance consumers' perceptions of product values are simultaneously necessary for the market penetration of energyefficient products.

Major electric appliances such as TVs, air conditioners, washing machines, and refrigerators are already widespread in developed countries, and households are now replacing them periodically. As the energy efficiency of products improves every year, replacing old products with new ones will lead to energy savings. Consequently, governments have encouraged the replacement of old appliances with new ones. Nevertheless, the replacement cycles of electric appliances have not been thoroughly investigated in previous studies. Wang and Matsumoto employed a duration model to develop an economic model that describes the appliance replacement cycle. Then they conducted an empirical analysis to determine how household characteristics affect the replacement cycle of refrigerators in Japan. They found that small-sized, elderly, and low-income households are reluctant to replace old appliances and contend that policies targeting such households are necessary.

Toritti's study focused on the energy consumption stage. He observed that household electricity usage fluctuated throughout the day. On weekdays, it increases when family members wake up in the morning and then decreases after they go out during the day. It rapidly increases after family members return home and decreases after bedtime. However, electricity supply must be prepared to meet peak-hour demands, whereas additional capacity prepared for peak hours is wasted during off-peak hours. Consequently, electric power companies have aimed at equalizing electricity usage throughout the day by setting nighttime electricity charges. This peak and off-peak problem will become increasingly relevant in the use of renewable energy, which is often generated at fixed times in a day. If peak time activities can be shifted to offpeak time, it will be possible to reduce the required generation capacity and promote renewable energy more easily. However, to understand the possibility of such a time shift in household activities, we need to understand the demand-side flexibility. In his paper, Toritti developed an intrinsic flexibility index based on people's activities during the timing of electricity demand and then analyzed the relationship between the intrinsic flexibility and spot prices in the UK wholesale electricity market.

Tanaka, Wilson, and Managi focused on the link between the energy choice stage at the initial stage and the energy consumption at the final stage. They observed that many developed countries have provided subsidies for installing solar panels in homes. In addition, some countries have adopted feed-in tariff (FIT) systems that purchase electricity generated by solar panels at a fixed price, while simultaneously raising the purchase price of electricity generated by traditional thermal power generation. Owing to such promotional programs, solar panels have rapidly become widespread in the residential sector. However, it remains unclear whether people change their electricity consumption after installing solar panels. Tanaka, Wilson, and Managi addressed this issue and examined whether the FIT system alters electricity consumption among Australian households, based on the matching method. Their empirical results reveal that Australian households increased their electricity purchases from power companies under the FIT system. This suggests that the energy consumption at the final stage is associated with the energy choice at the initial stage.

Morita, Iwata, and Arimura focused on the link between product purchases in the second stage and energy consumption in the last stage. They propose that households can reduce the unit price of obtaining energy services by purchasing energyefficient products. If households could obtain energy services at cheaper rates, they would use more energy services than before. Therefore, some of the energy conservation benefits gained by improving energy efficiency will be lost. This concept, advocated by Jevons (1865) is known as the rebound effect and has been extensively investigated in the literature. However, previous studies on rebound effects have only examined how energy consumption has changed after the introduction of the product and have not yet investigated how product use has changed. Given that households use multiple products at home, it may be more appropriate to focus on changes in product use. Morita, Iwata, and Arimura conducted a survey to examine whether Japanese households lowered the room temperature after the installation of a new air conditioner. Their empirical results reveal that energy efficiency improvements counteract the energy-saving behaviors of the temperature setting, resulting in a rebound effect.

Although we report valuable findings for energy conservation policies in the residential sector in this special issue, we do not discuss some important aspects. All households will be affected by energy conservation policies; however, certain types of households will be affected more severely. There are economies of scale in household energy use, and small households consume more energy per capita (Ironmonger et al. 1995; Schröder et al. 2015) . Therefore, compared to ordinary households, small households, such as single-parent households, have a greater energy consumption burden. It is also well known that energy expenditure increases with age (Bardazzi and Pazienza 2017; Inoue et al. 2021) . Although the number of single-person households is expected to increase in Europe and East Asian countries, single-person households without sufficient retirement benefits can fall into energy poverty in the future. Further research is required to find a way to save household energy without aggravating energy poverty problems.

Household energy consumption patterns vary from region to region because they are linked to weather conditions and social customs. People at high latitudes can enjoy long, cool daylight hours in summer, albeit they require a lot more energy to heat their homes during winter. On the other hand, people in low latitudes consume less energy in winter but consume more electricity during the hot summers. People living in rural areas with weak public transportation need to use vehicles for traveling and thus consume more gasoline. On the other hand, people facing the urban heat in remote areas use air conditioners more intensively to sleep comfortably in summer. The differences in weather conditions and lifestyles should also make a difference in the demand for energy services, and thus, the type of energy services that households preferentially reduce will differ from region to region. However, current energy conservation policies in the residential sector are designed without taking into account the difference in energy saving potentials between regions. For example, the same subsidy for solar power installation is offered in areas with good sunshine and areas with poor sunshine. Further research is needed to reflect the difference in energy demand between regions in the design of carbon mitigation policies.

We intended to hold the international conference in March 2020 with financial support from the Institute of Economic Research at Aoyama Gakuin University and to invite the presented papers for this special issue. However, due to the COVID-19 pandemic, we were forced to cancel the conference at the last minute. We would like to express our gratitude to Ms. Kuramochi and Ms. Fujioka from the Institute for her invaluable support with the conference preparation. Although the workshop itself was canceled, we received many papers for this special issue. I am very pleased to have published five articles following a strict peer review at such a difficult time.

Modelling household energy expenditures using micro-data

Switch off the light, please! Energy use, aging population and consumption habits

Turning on the lights: a meta-analysis of residential electricity demand elasticities

Household energy consumption pattern changes in an aging society. The case of Japan between 1989 and 2014 in retrospect

Economies of scale in energy use in adult-only households

The decline in average family size and its implications for the average benefits of within-household sharing

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