This is an early access version, the complete PDF, HTML, and XML versions will be available soon.
Open AccessArticle
Behavioral Efficiency and Residential Electricity Consumption: A Microdata Study
by
Thomas Weyman-Jones
Thomas Weyman-Jones 1,*
and
Júlia Mendonça Boucinha
Júlia Mendonça Boucinha 2
1
Loughborough Business School, Loughborough University, Loughborough LE11 3TU, UK
2
Independent Researcher, 1400-126 Lisboa, Portugal
*
Author to whom correspondence should be addressed.
Sustainability 2024, 16(15), 6646; https://doi.org/10.3390/su16156646 (registering DOI)
Submission received: 29 April 2024
/
Revised: 25 July 2024
/
Accepted: 30 July 2024
/
Published: 3 August 2024
Abstract
Sustainability requires that policy makers be able to use market signals to implement energy and environmental policy and that energy consumers respond rationally to these signals. Therefore, it is essential to understand how consumers’ responses to market signals are formed. We propose a new model to measure behavioral efficiency in residential electricity consumption derived from the individual householder indirect utility function. This leads to a pair of simultaneous stochastic demand frontiers for electricity consumption (kWh) and power demand (kVA). Each is a function of power demand (standing) charges and energy demand (running) charges together with the net income after demand charges, the stock of appliances and household characteristics. We estimate the model using two samples of household responses, each of which represents around one percent of the total national population available, and we also pool these samples using pseudo-panel data procedures. We demonstrate how the resulting elasticity and efficiency estimates are related to the theory of behavioral agents from recent developments in behavioral economics. These developments also use the individual indirect utility function to derive propositions based on internality and hyperbolic discounting. The econometric estimates permit the calibration of the individual welfare effects of policy initiatives using carbon tax and price incentives with behavioral agents.
Share and Cite
MDPI and ACS Style
Weyman-Jones, T.; Boucinha, J.M.
Behavioral Efficiency and Residential Electricity Consumption: A Microdata Study. Sustainability 2024, 16, 6646.
https://doi.org/10.3390/su16156646
AMA Style
Weyman-Jones T, Boucinha JM.
Behavioral Efficiency and Residential Electricity Consumption: A Microdata Study. Sustainability. 2024; 16(15):6646.
https://doi.org/10.3390/su16156646
Chicago/Turabian Style
Weyman-Jones, Thomas, and Júlia Mendonça Boucinha.
2024. "Behavioral Efficiency and Residential Electricity Consumption: A Microdata Study" Sustainability 16, no. 15: 6646.
https://doi.org/10.3390/su16156646
Note that from the first issue of 2016, this journal uses article numbers instead of page numbers. See further details
here.
Article Metrics
Article metric data becomes available approximately 24 hours after publication online.