Electricity Consumption and Durable Housing: Understanding Cohort Effects
We find that households living in California homes built in the 1960s and 1970s had high electricity consumption in 2000 relative to houses of more recent vintages because the price of electricity at the time of home construction was low. Homes built in the early 1990s had lower electricity consumption than homes of earlier vintages because the price of electricity was higher. The elasticity of the price of electricity at the time of construction was -0.22. As homes built between 1960 and 1989 become a smaller share of the housing stock, average household electricity purchases will fall.
We thank Tom Gorin and Erin Mansur for sharing data with us. We thank Catherine Wolfram and conference participants at the December 2009 UC Berkeley Green Buildings Conference for useful comments. We thank the Richard Ziman Real Estate Center at UCLA for generous research funding. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Dora L. Costa & Matthew E. Kahn, 2011. "Electricity Consumption and Durable Housing: Understanding Cohort Effects," American Economic Review, American Economic Association, vol. 101(3), pages 88-92, May. citation courtesy of