Determinants of efficiency in residential electricity demand: stochastic frontier analysis on Japan

Abstract

Background: Rapidly increasing residential electricity demand has made raising energy efficiency an important policy issue in controlling electricity demand. Methods: This study uses a stochastic frontier model to estimate the residential electricity demand function and analyse electricity energy efficiency levels and their determinants using regional data on Japan. Results: The results confirm the importance of household dwelling types for determining the electricity energy efficiency. Specifically, the findings suggest that household size and floor area are key to electricity savings, but the ageing Japanese society shows a limited relationship with electricity savings. Further, promoting living in areas where the population has aggregated also results in electricity savings. Conclusions: The findings suggest that forming urbanised cities and realising multi-polarisation-type national spatial developments might improve electricity energy efficiency and stimulate regional economies.