Determinants of energy consumption and exposure to energy price risk: a UK study

Abstract: In this study, we examine the drivers of household energy consumption with a view towards gauging which households are particularly vulnerable to energy price risk. We specifically investigate the relative importance of household socio-economic characteristics versus dwelling characteristics in explaining per capita gas consumption for space heating. The study draws upon a large random sample of households from the English Housing Survey (EHS) to understand the importance of, and interaction between, household and building characteristics. A multivariate OLS regression is used to identify the relative effects of various consumption drivers on gas used for space heating. The use of standardised coefficients allows for a discussion of the marginal contributions of each factor to energy consumption. The results show that variation in gas usage is largely determined by household socio-economic characteristics rather than physical dwelling characteristics. This includes the significant influence of household characteristics such as composition (or type), size, employment status, and income. The main contribution of the study is to underline the relative importance of household socio-economic characteristics over dwelling characteristics in explaining per capita energy consumption. The reported findings challenge the prevailing policy practice, which focusses mostly on dwelling characteristics