Regional Determinants of Energy Efficiency: Residential Energy Demand in Japan

Controlling the rapid growth of residential energy demand and enhancing energy efficiency are key policy issues in Japan. Thus, this study aims to estimate a residential energy demand function by conducting a stochastic frontier analysis and analyze the regional determinants of energy efficiency. The results indicate that population density and electrification rate foster energy efficiency and exert the same degree of impact. The study also highlights that population concentration has a nonlinear effect on energy efficiency. In other words, when combined with population concentration, the promotion of electrification policies can significantly contribute toward improving energy efficiency in the residential sector and consequently, have a positive effect on Japan's regional economy.