Estimating home energy decision parameters for a hybrid energy-economy policy model

Hybrid energy-economy models combine the advantages of a technologically explicit bottom-up model with the behavioral realism sought after by top-down models in order to help policymakers assess the likely technology-specific response and economy-wide impact of policies to induce technological change. We use a discrete choice survey to estimate key technology choice parameters for a hybrid model. Two choice experiments are conducted for household energy-related decisions about retrofitting home building structures and choosing a space heating and conditioning system. Based on a discrete choice survey of 625 householders, we estimate a discrete choice model and then demonstrate how its parameters translate into the behavioral parameters of a hybrid model. We then simulate household energy policies, including, individual subsidies and increased regulations.