Why Has California's Residential Electricity Consumption Been so Flat Since the 1980s?: A Microeconometric Approach

38 Pages Posted: 10 May 2010  

Dora L. Costa

University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER)

Matthew E. Kahn

University of Southern California; National Bureau of Economic Research (NBER)

Date Written: May 2010

Abstract

We use detailed microeconomic data to investigate why aggregate residential electricity consumption in California has been flat since 1980. Using unique micro data, we document the role that household demographics and ideology play in determining electricity demand. We show that building codes have been effective for homes built after 1983. We find that houses built in the 1970s and early 1980s were energy inefficient relative to houses built before 1960 because the price of electricity at the time of construction was low. Employing our regression estimates, we construct an aggregate residential electricity consumption time series index from 1980 to 2006. We show that certain micro determinants of household electricity consumption such as the phase in of building codes explain California's flat consumption while other factors (such as rising incomes and increased new home sizes) go in the opposite direction. Because homes are long-lived durables, we have not yet seen the full impact of building codes on California's electricity consumption.

Suggested Citation

Costa, Dora L. and Kahn, Matthew E., Why Has California's Residential Electricity Consumption Been so Flat Since the 1980s?: A Microeconometric Approach (May 2010). NBER Working Paper No. w15978. Available at SSRN: https://ssrn.com/abstract=1601729

Dora L. Costa (Contact Author)

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Matthew E. Kahn

University of Southern California ( email )

Los Angeles, CA 90089
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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