PUBLICATIONS & REPORTS

PUBLICATIONS & REPORTS

Economic Effects of Temperatures on Household Electricity Consumption: A review of the empirical literature

Author KO Yi-Chun
Affiliation Asian Growth Research Institute
Date of Publication 2023.3
No. 2022-07
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Contents Introduction

This paper reviews the previous studies on the relationship between temperature and residential electricity consumption. In particular, we focus primarily on recent studies (2020~2022). The climate will affect household electricity use by altering residential responses to short-term weather shocks and long-term adaptation. Existing studies found a nonlinear (generally, U-shaped) response function with higher residential electricity consumption on very cold and hot days with threshold temperatures of about 50-77°F (10-25°C). In addition, it is necessary to study heterogeneity along different dimensions. A valuable direction for future research would be to see if short-term and long-term results hold each other. Another gap that needs to be filled is the analysis of the impact on a national and regional scale in Japan. Other household consumption may also be hit hard by temperature extremes, which could lead to new social problems under climate change. This is another fundamental issue that needs attention.