Business, College of


Date of this Version

Summer 7-28-2014


Pursley, Jeffrey L., (2014), The Impact on Consumer Behavior of Energy Demand Side Management Programs, Measurement Techniques and Methods


A THESIS Presented to the Faculty of The Graduate College at the University of Nebraska In Partial Fulfillment of Requirements For the Degree of Master of Arts, Major: Economics, Under the Supervision of Professor David I Rosenbaum. Lincoln, Nebraska: July 2014

Copyright (c) 2014 Jeffrey L. Pursley


Much effort has gone into measuring the impact of Demand Side Management (DSM) programs on energy usage, particularly in regards to electric usage. However, there are potential biases in such measurements. This paper explores one of these potential biases, the rebound effect. This effect is caused by changes in consumer behavior as a result of DSM programs. The work of Steven Braithwaite and Douglas Caves provide the starting point for this analysis, although the rebound effect is referenced in many other works in this field.

In an effort the estimate this effect, data from the Nebraska Energy Office’s DSM programs was utilized. Econometric and survey techniques were employed to isolate changes in energy usage solely related to the DSM programs. Further econometric techniques were used to separate the resulting behavioral change from the change resulting from the DSM investment itself. Additionally, the returns to scale regarding DSM investments were estimated.

Based on the available data, a distinct behavioral change was observed. The observed behavioral change was more pronounced among lower income households. Many of the DSM investments exhibited diminishing returns to scale.

Advisor: David I. Rosenbaum