What matters in residential energy consumption: evidence from France

Given objectives set by countries to realize energy-savings and decrease greenhouse gas emissions, an understanding of the main factors driving household energy consumption is crucial for the formulation of efficient policy measures. Our objective is to identify the main determinants of households energy consumption. The model incorporates a discrete/continuous decision framework, which allows for interactions between decisions on the heating system (the discrete choice) and decisions on the consumption of energy (the continuous choice). We have three main contributions. First, we explore the role of households' socio-economic characteristics vs. technical properties of dwelling in explaining energy consumption. Second, we identify some of the main sources of energy conservation in the housing sector. Third, we estimate price-elasticity and income-elasticity in the French housing sector at a micro-level. Results show that the intensity of energy used per m² is almost completely determined by the technical properties of the dwelling and by the climate. The role of socio-demographic variables is particularly weak. This means that the challenge to environmental policies is to encourage households to undertake renovations.

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