CHAPTER 1: INTRODUCTION1.1 The Objectives of this StudyThe primary objective of this study is to provide an analysis of the factors that affectenergy use in the household sector1in Ireland. Energy is a commodity2 which is vitalfor the existence of modern life. Without the availability of energy, we could not usegas or oil to heat our homes, electricity to cook our food and petrol to drive our cars.The advent of modern living has meant that energy is becoming an increasinglyimportant commodity and society has now become crucially dependent on its ease ofavailability and secure supply. The beginning of this century has seen a large degreeof uncertainty emerge over the future prospects for energy use globally. The recentslowdown in the global economy has tempered this uncertainty somewhat, howeverthe International Energy Agency in its most recent World Energy Outlook (2012)publication suggest that demand for energy will continue to grow strongly, increasingby one-third over the period to 2035 particularly due to the increased demand fromChina, India and the Middle East.The current research into the economics of energy use spans a wide variety ofdifferent topics. The majority tend to concentrate on macroeconomic issues, forexample, investigating the causal relationship between economic activity and energyconsumption (see Ozturk, 2010 for a survey), the effects of climate change (Stern,

1 Throughout this study, both the words ‗household‘ and ‗residential‘ will be used interchangeably andare taken to mean the same thing. However precedence will be given to using ‗household‘ as this betterreflects the micro focus of this study whereas the word ‗residential‘ is more associated with a macrofocus i.e. the residential sector.2For the purposes of this study, energy is a commodity just like clothes or food and thus energy use istaken to mean the consumption of it by the end user i.e. the household. For example the energy used toheat our homes is based on the purchase and consumption of oil or gas or solid fuel. To drive our carwe need to purchase petrol or diesel.22006) and the effects of environmental policy measures such as a carbon tax (Wier etal., 2005, Kerkhof et al., 2008 and Callan et al., 2009). However there is a growingtrend toward the use of household survey or micro level data as it can provide richersources of information and opportunities to develop a deeper understanding of thefactors affecting energy use. For example, Yun and Steemers (2011) and Musti et al.(2011) are two recent studies which use micro level data to analyse the behaviouralaspects of household energy use.

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