Rebound Effect and Ownership in the Residential Household Sector
Project duration: 1/2010 - 4/2010
After introducing energy efficiency measures a change in the residential households’ energy consumer behavior can reduce the energy savings potential expected based on engineering-economic calculations alone. This effect is known as “rebound effect” and, if larger than unity, can even lead to an increase in energy consumption as a result of energy efficiency improvements („backfire”).
In this research project, we estimated the size of the direct rebound effect for heating in German residential households (defined as a price elasticity of energy demand) using a fixed effects econometric model. Direct rebound effects in comparable studies on other countries range from 21% to 43%. The data used are from a representative repeated panel survey among some 11,000 residential households in Germany (SOEP), provided by the German Institute of Economic Research (DIW Berlin).
Our study confirms the existence of a rebound effect for each group of households considered. We find that income and ownership matter significantly for the size of the direct rebound effect, i.e. the amount of energy consumption “taken back” when energy efficiency rises. The estimated rebound effects range between 12% for owners and 49% for tenants, calling for a dedicated policy to mitigate the rebound effect in energy efficiency policy-making. The data sets for owners and tenants, respectively, are additionally split by income groups (all, low, high), providing some additional insights. We suspect that the results for the household owners could be upward biased.
Overall, the results from our analysis indicate that political measures for reaping the benefits from technical efficiency improvements contribute to the reduction in energy demand only to a limited extent. On the basis of our results, it becomes evident that the prevailing political measures need to be modified accordingly.
Madlener R., Hauertmann M. (2011). Rebound Effects in German Residential Heating: Do Ownership and Income Matter?, FCN Working Paper No. 2/2011, Institute for Future Energy Consumer Needs and Behavior, RWTH Aachen University, February.
Supervised student research
Hauertmann M. (2010). Nachweis des Rebound-Effekts für Raumwärme in deutschen Haushalten, Study thesis, Chair of Energy Economics and Management, Faculty of Business and Economics, RWTH Aachen University, April.