Reducing household energy consumption has been a main target for environmental policies in order to reduce emissions. Policy measures are aimed at the household level, whereas the target is set on total consumption. Since households respond differently to price and income changes, we would expect their response to energy policy measures to vary across household groups as well. This makes total household demand sensitive to changes in the composition of households with different behaviour. This is the source of aggregation problems, which makes it difficult to use results from empirical analysis directly to calculate how aggregated demand responds to various policy measures.
To analyse how the entire household sector responds to policy measures, this project attempts to increase our knowledge with respect to how various groups of households respond to price and income change, both in the short and long run, and to develop methods for consistent aggregation of individual demand response over time.
Models:
SHE: Model for simulation of individual demand response.