Heterogeneity in Price Responsiveness for Residential Space Heating in Germany

FCN Working Paper No. 5/2015

35 Pages Posted: 3 Feb 2016 Last revised: 21 Nov 2016

See all articles by Hendrik Schmitz

Hendrik Schmitz

RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN)

Reinhard Madlener

RWTH Aachen University

Date Written: November 1, 2016

Abstract

Space heating and hot water expenditures make up the majority of household energy demand in Germany, at 83.2%, making them an attractive target for energy policies. Using a panel dataset derived from yearly residential household surveys covering the years 1996 to 2014, we identify the determinants of heating expenditures for German households. We discover significant heterogeneity in expenditures depending on socioeconomic variables. For the full sample, we find a price elasticity of heating expenditures of 0.629. Elasticities vary significantly between individual groups, with values ranging from 0.523 to 0.716. Furthermore, a large number of technical and socio-demographic factors are significant in determining energy use. Our findings have implications for evaluating the effectiveness of policy measures that aim at influencing energy use across different groups of consumers.

Keywords: Germany, Space heating, Heating expenditures, Heterogeneity

JEL Classification: C23, D12, Q41

Suggested Citation

Schmitz, Hendrik and Madlener, Reinhard, Heterogeneity in Price Responsiveness for Residential Space Heating in Germany (November 1, 2016). FCN Working Paper No. 5/2015. Available at SSRN: https://ssrn.com/abstract=2726078 or http://dx.doi.org/10.2139/ssrn.2726078

Hendrik Schmitz (Contact Author)

RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN) ( email )

Mathieustrasse 6
Aachen, 52074
Germany
+49 241 80 49834 (Phone)
+49 241 80 49829 (Fax)

HOME PAGE: http://www.fcn.eonerc.rwth-aachen.de/cms/~dndh/E-ON-ERC-FCN/

Reinhard Madlener

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustra├če 10
Aachen, 52074
Germany
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)

HOME PAGE: http://www.eonerc.rwth-aachen.de/fcn

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