Transaction Costs and their Impact on Energy Demand Behaviour
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The very recent trends in energy demand are incompatible with empirically fitted price elasticities. Different reasons are conceivable to explain this behaviour — technological progress, public policy etc. This paper argues that transaction costs associated with investment decisions of households — for energy conservation and/or fuel substitution — may have an significant impact. This in turn can explain — at least partially and for some sectors of demand (residential) — the recent energy pattern. The paper provides a theoretical discussion of these aspects and complementary, some empirical examples.
KeywordsTransaction Cost Energy Demand Energy Price Fuel Price Indoor Temperature
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