ABSTRACT
This chapter aims to explicitly investigating the income–energy-saving relationship by considering UK households' behaviours as a case study. It identifies the main drivers of energy-saving behaviours by estimating a Quadratic Almost Ideal Demand System (QUAIDS), through the inclusion of an estimated variable indicating the annual amount of energy saved on domestic lighting and heating system. The chapter describes the data used in the analysis and the empirical framework concerning the QUAIDS model. It estimates the households' willingness to save (WTS) and how it changes with the income distribution. The Budget Household Panel Survey (BHPS) is an annual survey consisting of a nationally representative sample of UK households. A different household production function may be specified in order to address different energy problems and other environmental goods should be taken into account together with other energy-saving typologies.
