Catching the Rebound: Economy-Wide Implications of an Efficiency Shock in the Provision of Transport Services by Households

28 Pages Posted: 21 Oct 2013

See all articles by Simon Koesler

Simon Koesler

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research

Date Written: October 14, 2013

Abstract

We investigate the rebound effect of a 10% energy efficiency improvement in the provision of private transport services by German households. In the process, we take into account that household behaviour may be influenced by habits, build on a detailed representation of the provision of private transport services, and disentangle the direct and indirect rebound effect. Our analysis shows that rebound has the potential to significantly reduce the expected energy savings of an energy efficiency improvement at households. In particular if households have a flexible demand structure, rebound can erode large parts of efficiency increases. Household habits have an initial detrimental effect on rebound. They limit the ability of households to adapt to changes in the prevailing price and income system and there with temporally block parts of the channels that lead to rebound. In the long run, however, if habits are formed on the basis of historic consumption, habits do not affect rebound. In isolation, the direct and indirect rebound effect of the efficiency shock are positive, but direct rebound is much stronger.

Keywords: rebound, efficiency improvement, energy efficiency, habits

JEL Classification: D13, D58, Q41, Q43

Suggested Citation

Koesler, Simon, Catching the Rebound: Economy-Wide Implications of an Efficiency Shock in the Provision of Transport Services by Households (October 14, 2013). ZEW - Centre for European Economic Research Discussion Paper No. 13-082, Available at SSRN: https://ssrn.com/abstract=2343141 or http://dx.doi.org/10.2139/ssrn.2343141

Simon Koesler (Contact Author)

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

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