Understanding Reference-Dependent Behaviors in Determining Electricity Consumption of Korean Households: Empirical Evidence and Policy Implications.
Saved in:
| Title: | Understanding Reference-Dependent Behaviors in Determining Electricity Consumption of Korean Households: Empirical Evidence and Policy Implications. |
|---|---|
| Authors: | Park, Jiyong1 (AUTHOR), Choi, Sunghee2 (AUTHOR) choisu@kmu.ac.kr |
| Source: | Energies (19961073). Jun2025, Vol. 18 Issue 11, p2686. 14p. |
| Subjects: | Consumption (Economics), Probit analysis, Electric power conservation, Variable costs, Prospect theory, Electric power consumption |
| Abstract: | This paper examines whether reference-dependent preferences play a role in determining household electricity consumption in the Korean context. To do so, we first establish six variables of reference costs based on monthly electricity billing information of the 1040 Korean household survey dataset and then test whether these reference costs affect the electricity consumption in the subsequent months using a probit regression analysis. The empirical results show that the residential electricity consumption for the current month is determined by the reference cost in comparison to the actual costs of the previous months. The significant role of reference costs in determining electricity consumption implies that the behaviors of the Korean residential electricity consumers can be explained by the prospect theory. Furthermore, as a policy implication, these results suggest non-price interventions for residential electricity conservation in Korea. [ABSTRACT FROM AUTHOR] |
| Copyright of Energies (19961073) is the property of MDPI and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) | |
| Database: | Engineering Source |
|
Full text is not displayed to guests.
Login for full access.
|
|
| Abstract: | This paper examines whether reference-dependent preferences play a role in determining household electricity consumption in the Korean context. To do so, we first establish six variables of reference costs based on monthly electricity billing information of the 1040 Korean household survey dataset and then test whether these reference costs affect the electricity consumption in the subsequent months using a probit regression analysis. The empirical results show that the residential electricity consumption for the current month is determined by the reference cost in comparison to the actual costs of the previous months. The significant role of reference costs in determining electricity consumption implies that the behaviors of the Korean residential electricity consumers can be explained by the prospect theory. Furthermore, as a policy implication, these results suggest non-price interventions for residential electricity conservation in Korea. [ABSTRACT FROM AUTHOR] |
|---|---|
| ISSN: | 19961073 |
| DOI: | 10.3390/en18112686 |
