Università della Svizzera italiana

Habits and rational behavior in residential electricity demand

Filippini, Massimo ; Hirl, Bettina ; Masiero, Giuliano

In: Resource and Energy Economics, 2018, vol. 52, p. 137-152

Households make an investment analysis when buying new electrical appliances. Therefore, expectations about future electricity consumption may have an impact on current consumption and investment decisions. Dynamic partial adjustment models of residential electricity demand neglect rational consumer behavior. In this paper we propose a model for residential electricity demand that allows for...

Università della Svizzera italiana

Rational habits in residential electricity demand

Filippini, Massimo ; Hirl, Bettina ; Masiero, Giuliano

Dynamic partial adjustment models of residential electricity demand account for the fact that households may not adjust electricity consumption immediately in response to changes in prices, income, and other relevant factors, because of behavioral habits or adjustment costs for the capital stock of appliances. However, forward-looking behavior is generally neglected. Expectations about future...