District heating versus self-heating: Estimation of energy efficiency gap using regression discontinuity design

Abstract

This paper employs regression discontinuity design to estimate the impact of heating modes on residents’ energy consumption, energy efficiency gap, and energy usage behavior, using the Chinese Residential Energy Consumption Survey (CRECS). We find that district heating increases total energy consumption and total heating expenditure. However, energy consumption and expenditure per unit of district heating are lower than self-heating, which means a positive energy efficiency gap between district heating and self-heating. With the estimates, we construct a model of household heating expenditure. The counterfactual simulation shows that district heating expenditure would be reduced by more than 35% if the heating fee is charged based on actual usage. We suggest government provide a quantity-based district heating service by implementing a two-part tariff pricing strategy.