What Drives Energy Use? Prices, Efficiency Policies, and the Demand Frontier
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| Format: | Preprint |
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2026
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| _version_ | 1866908961676984320 |
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| author | Benatia, David Molinié, Rémy Pineau, Pierre-Olivier |
| author_facet | Benatia, David Molinié, Rémy Pineau, Pierre-Olivier |
| contents | What drives cross-state differences in U.S. energy consumption? We combine LMDI decomposition, stochastic frontier analysis, and variable-importance methods on a panel of 50 states plus DC over the 2006--2022 period. The observed 12.8% decline in per capita energy use is driven almost entirely by intensity improvements. A variance decomposition attributes 63% of cross-state variation in log energy use to the demand frontier, 34\% to inefficiency above it, and 3% to noise. Within the frontier, energy prices account for roughly 26% of cross-state variation and state efficiency policies for about 13%, while GDP and climate together explain only around 10\%. Efficiency policies also operate through a second channel by reducing inefficiency, adding a further 6 percentage points to their total contribution. The results suggest that pricing and regulation are the primary drivers of cross-state energy use differences. |
| format | Preprint |
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arxiv_https___arxiv_org_abs_2604_12112 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | What Drives Energy Use? Prices, Efficiency Policies, and the Demand Frontier Benatia, David Molinié, Rémy Pineau, Pierre-Olivier General Economics Economics What drives cross-state differences in U.S. energy consumption? We combine LMDI decomposition, stochastic frontier analysis, and variable-importance methods on a panel of 50 states plus DC over the 2006--2022 period. The observed 12.8% decline in per capita energy use is driven almost entirely by intensity improvements. A variance decomposition attributes 63% of cross-state variation in log energy use to the demand frontier, 34\% to inefficiency above it, and 3% to noise. Within the frontier, energy prices account for roughly 26% of cross-state variation and state efficiency policies for about 13%, while GDP and climate together explain only around 10\%. Efficiency policies also operate through a second channel by reducing inefficiency, adding a further 6 percentage points to their total contribution. The results suggest that pricing and regulation are the primary drivers of cross-state energy use differences. |
| title | What Drives Energy Use? Prices, Efficiency Policies, and the Demand Frontier |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2604.12112 |