Determinants of Households’ Space Heating type and Expenditures in Italy

In Italy, several policy measures have been implemented in order to increase energy efficiency and reduce carbon emissions especially concerning the household sector. However, in order to design and implement these policy measures efficiently, it is necessary to get a better understanding of the factors influencing household energy behavior. In this paper, by using disaggregated data from the 2009 Italian Household Budget Survey, we firstly identify the factors which have a strong effect on the choice of a specific fuel by using a multinomial logit model taking into account the heterogeneity of households in the Italian regions. Secondly, we focus on the analysis of the determinants of space heating expenditure bearing in mind the possible influence of the choice of fuel on energy consumption. Finally, by using the results of the multinomial logit model we examine the implications of a simulated scenario concerning tax incentives for energy efficiency improvement. Many of the variables concerning the socio-economic characteristics of households(i.e. family income and type of family) and the characteristics of the dwellings (i.e. year of construction) prove to be important determinants of the choice of space heating technologies and of energy consumption. Altogether, our results help to identify the determinants of household heating behaviour in Italy. Designing and developing target oriented policy measures focusing on specific determinants will help policy makers to achieve the main objectives of Italy’s energy policy which are to increase energy efficiency and lower energy consumption thus reducing carbon emissions.