Three Essays Examining Household Energy Demand and Behavior

This dissertation consists of three essays examining household energy decisions and behavior. The first essay examines the adoption of energy efficient Energy Star home appliances by U.S. households. Program effectiveness requires that consumers be aware of the labeling scheme and also change their purchase decisions based on label information. The first essay examines the factors associated with consumer awareness of the Energy Star label of recently purchased major appliances and the factors associated with the choice of Energy Star labeled appliances. The findings suggest that eliminating identified gaps in Energy Star appliance adoption would result in house electricity cost savings of $164 million per year and associated carbon emission reductions of about 1.1 million metric tons per year. The second essay evaluates household energy security and the effectiveness of the Low-Income Home Energy Assistance Program (LIHEAP), the single largest energy assistance program available to poor households within the United States. Energy security is conceptually akin to the well-known concept of food security. Rasch models and household responses to energy security questions in the 2005 Residential Energy Consumption Survey are used to generate an energy insecurity index that is consistent with those found in the food insecurity literature. Participating in LIHEAP is found to significantly reduce household energy insecurity score in the index. Further, simulations show that the elimination of the energy assistance safety net currently available to households increases the number of energy insecure households by over 16 percent. The third essay develops a five equation demand system to estimate household own-price, cross-price and income elasticities between electricity, natural gas, food at home, food away from home, and non-durable commodity groups. Household cross-price elasticities between energy and food commodities are of particular importance. Energy price shocks reduce food expenditures for low-income households, as indicated by negative cross-price elasticity estimates for food and energy commodities. Additionally, low-income households reduce energy expenditures more than other households, further indicating ``heat or eat'' behavior. Results from all three essays provide policy makers with helpful information to shape future federal energy programs.