Ruhr Economic Papers

Ruhr Economic Papers #722

Heterogeneity in Residential Electricity Consumption: A Quantile Regression Approach

by Manuel Frondel, Stephan Sommer and Colin Vance

RUB, RWI, 11/2017, 25 S./p., 8 Euro, ISBN 978-3-86788-842-4 DOI: 10.4419/86788842

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Abstract

Drawing on the most recent wave of the German Residential Energy Survey (GRECS), this paper estimates the contribution of individual appliances to household electricity consumption. Moving beyond the standard focus of estimating mean effects, we combine the conditional demand approach with quantile regression methods to capture the heterogeneity in the contribution of each appliance to the distribution of household electricity consumption. While reflecting correlations, rather than causal relationships, our results indicate substantial differences in the end-use shares across households originating from the opposite tails of the electricity consumption distribution, highlighting the added value of applying quantile regression methods in estimating consumption rates of electric appliances.

JEL-Classification: D12, Q41

Keywords: Electricity consumption; conditional demand approach; quantile regression methods

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