Habit Formation and Consumption of Energy for Heating: Evidence from a Panel of Danish Households

Abstract

In this paper we ask if consumption of energy for space heating by households is habit forming. A model of intertemporal consumption allocation allowing for habit-forming preferences is estimated on a register-based panel data set with high quality information about consumption of natural gas for a sample of Danish households. Results indicate that preferences are weakly habit forming.

Keywords

Space heating Intertemporal consumption habit formation household energy panel data Denmark

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