Heterogeneity in the Effect of Home Energy Audits: Theory and Evidence

24 Pages Posted: 17 Jan 2013

See all articles by Manuel Frondel

Manuel Frondel

RWI Leibniz Institute for Economic Research ; Ruhr University Bochum (RUB)

Date Written: January 16, 2013

Abstract

A longstanding question in the study of energy demand concerns the role of information as a determinant of home efficiency improvements. Although the provision of information via energy audits is frequently asserted to be an effective means for governments to encourage the implementation of efficiency-enhancing renovations, empirical support for this assertion is tenuous at best. Apart from endogeneity issues with respect to receiving an audit, two other factors have complicated attempts to measure their effect: First, the nature of the information provided by the audit is typically unobserved, and, second, the response to this information may vary over households. Using household data from Germany, we address both sources of heterogeneity by estimating a random-parameter model of four retrofitting alternatives. In addition to confirming the importance of costs and savings as determinants of renovation choices, our results suggest that the effects of consultancy vary substantially across households, with some households responding negatively to the provision of information.

Keywords: energy audit, environmental policy, mixed logit, random-coefficient models

JEL Classification: C35, D81, Q41

Suggested Citation

Frondel, Manuel, Heterogeneity in the Effect of Home Energy Audits: Theory and Evidence (January 16, 2013). USAEE Working Paper No. 13-100. Available at SSRN: https://ssrn.com/abstract=2201992 or http://dx.doi.org/10.2139/ssrn.2201992

Manuel Frondel (Contact Author)

RWI Leibniz Institute for Economic Research ( email )

Hohenzollernstr. 1-3
45128 Essen
Germany

Ruhr University Bochum (RUB) ( email )

Universitätsstraße 150
Bochum, NRW 44780
Germany

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