The effect of urban renewal on residential energy consumption expenditure--the example of shantytown renovation

Abstract

Building sustainable cities should guarantee affordable energy. The high cost of energy consumption remains a problem in the process of renewing cities. By using the difference-in-differences method, this paper examines the effect of shantytown renovation, an urban renewal initiative, on residential energy consumption expenditure. The results show that: (1) shantytown renovation significantly reduced residential energy consumption expenditure, and the result still held after a series of robust tests. (2) Shantytown renovation reduced the share of residential energy consumption expenditure in total consumption and subsistence consumption expenditure. (3) Household consumption expenditure per capita was a potential channel through which shantytown renovation affected residential energy consumption expenditure as well as its share. (4) Through analyzing the differences in urban-rural divide, household registration, and consumption levels among households, shantytown renovation significantly reduced residential energy consumption expenditure and its share among urban households, non-mobile households, and households with medium consumption levels. (5) Shantytown renovation had a significantly negative effect on the proportion of residential energy consumption expenditure in subsistence consumption expenditure among households with low consumption levels. The findings of this study offer guidance for raising new cities while more effectively protecting the energy needs of the public, to reach the UN Sustainable Development Goals regarding cities and energy.