| Abstract: | Economic theory suggests that residential expenditures on energy conservation and renewable energy sources will be determined by the ability of households to purchase conservation inputs, their incentive to invest in conserving energy, the energy efficiency of existing homes and miscellaneous factors such as climate and age of the home-owner. Empirical analyses of energy-related expenditures reported on individual income tax returns confirm the importance of household income, energy price increases and climate conditions in determining energy conservation investments. Income tax credits are also found to have stimulated residential spending on conservation and renewable energy. |
