Analysis of building energy consumption through panel data: The role played by the economic drivers

Policy makers have realized that without significant increases in the energy efficiency and notable reductions in the energy use of the household sector, it will be impossible to lower carbon dioxide emissions and mitigate the risks of climate change at the global level. The energy demand in residential buildings is influenced by several parameters, such as national economic growth, climate and weather, demographic structure, and technological development. In this paper, we analyze the determinants of electricity and natural gas consumptions in Italy during the period from 2004 to 2013. We provide estimates of price and income elasticities of the demand for both the energy sources in the residential sector. The role played by both energy price and household income is worth attention because it provides evidence for the occurrence of the direct rebound effect. Therefore, the economic drivers of the energy demand are important to improve the policies meant to reduce greenhouse gas emissions and contrast the global warming.