Estimating the efficiency in overall energy consumption: Evidence from Slovenian household-level data

• Published in: Energy economics 2022-10, Vol.114, p.106241, Article 106241
• Main Authors: Dolšak, Janez, Hrovatin, Nevenka, Zorić, Jelena
• Format: Article
• Language: English
• Subjects: Energy efficiency; Energy use; Residential sector; Stochastic frontier analysis; Subvector Shephard input distance function
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2022.106241

This study measures the efficiency of energy consumption in the residential sector in Slovenia. It extends the existing research on the estimation of electricity consumption efficiency by considering the consumption efficiency of multiple energy sources used in households. The detailed disaggregated data from two cross-sectional surveys conducted in the years 2010 and 2014, resulting in a sample of 6882 Slovenian households, is used in the estimation. The study includes energy services in a stochastic frontier framework through a sub-vector Shephard energy input distance function. Several household characteristics are considered in the estimation of energy consumption to control for household heterogeneity. The results reveal that Slovenian households have substantial potential for energy savings, which can be achieved through the replacement of inefficient energy-using capital stock and changed behavioural patterns. Specifically, we found the average inefficiency of energy consumption in Slovenian households to be 25.1% in 2010 and 23.3% in 2014, indicating a slight improvement in residential energy efficiency in the observed period, which is also in line with the EU energy-efficiency targets. •The efficiency in the overall energy use in Slovenian households is estimated.•The stochastic frontier analysis is applied using the energy input distance function.•The detailed disaggregated household data is used.•Multiple residential energy sources are considered.•The average estimated level of energy efficiency is between 75 and 77%.