Household energy consumption, energy efficiency, and household income–Evidence from China

Abstract

In recent decades, China has experienced similar increasing household energy consumption and income trends. However, how household energy efficiency changes and relates to household income remains unclear. Based on the panel stochastic frontier analysis (SFA) model, we find: (1) China's household energy efficiency decreased from 0.917 in 2002 to 0.874 in 2021on average, resulting in growing inefficient energy use from 1779 tons of coal equivalent (tce) in 2002 to 14,773 tce in 2021; (2) household income negatively relates to household energy efficiency, and impacts the distribution of inefficient energy use; (3) household energy efficiency in low-income areas is always the highest and decreases slowly, while that in high-income areas is the lowest and decreases faster; (4) in the low-income region, household survival needs growth with rising income is the main reason for the decline in energy efficiency; in the middle-income group, household survival needs growth and consumption upgrading drives energy efficiency down before and after 2011, respectively; while household consumption upgrading is the driving force for the downward trend of energy efficiency in the high-income regions. Then, corresponding policy implications are proposed.