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The Economics of House Heating

Publication Type:

Journal Article


Scott, A.


Energy Economics, Number 2, p.130-141 (1980)




House heating consumes a significant quantity of fuel. But, the author argues. studies in this area have so far been unsatisfactory because they have lacked a sound basis in economic theory. Here the author develops a house heating fuel consumption model which incorporates fuel price, consumers' income and utility functions, and a heat production function which treats the house as a firm producing heat levels. The concept of an attainable heat function is introduced. This links heat levels with the amount consumers can spend on fuel and its omission has been a major failing of previous studies. The model is investigated empirically and hypotheses about fuel price, real incomes, temperature, and insulation are tested.