Econometric Analysis of Household Energy Consumption in the United States, 2006 and 2008

Abstract

Household expenditures on electricity and gasoline account for a very large share of household budget in the United States. Considering the upward trend in energy price during recent years, this study investigated U.S. household energy consumption patterns of in-home electricity usage and gasoline for transportation. Cross-sectional data for 2006 and 2008 were used to examine the variation in household energy consumption on a quarterly basis. Consumer Expenditure Survey (CES) data were obtained from the Bureau of Labor Statistics, whereas energy prices data were obtained from U.S. Energy Information Administration. Descriptive statistical analysis, and OLS and Tobit models were applied in the econometric investigation. Natural environment, home structural characteristics, household characteristics, household preference and market environment related explanatory variables were used to examine energy uses. The results strongly indicate that lifestyle such as large home and heavy dependence on individual transportation influence energy uses for American households. The findings from this study help us to better understand household energy consumption behavior and promote sustainable growth and develop effective policies to reduce energy consumption and GHGs emissions.