The Long-Run Dynamics of Electricity Demand: Evidence from Municipal Aggregation

We study the dynamics of residential electricity demand by exploiting a natural experiment that produced large and long-lasting price changes in over 250 Illinois communities. Using a flexible difference-in-difference matching approach, we estimate that the price elasticity of demand grows from − 0.09 in the first six months to − 0.27 two years later. We find similar results with a dynamic model in which usage is a function of past and future prices. Our findings highlight the importance of accounting for consumption dynamics when evaluating energy policy. (JEL L94, L98, Q41, Q48)

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Testing for Changes in the Price Elasticity of Residential Electricity Demand

Northeastern Journal of Agricultural and Resource Economics ◽

10.1017/s0899367x00001112 ◽

1986 ◽

Vol 15 (2) ◽

pp. 123-129 ◽

Cited By ~ 2

Author(s):

Thomas H. Stevens ◽

Gail Adams

Keyword(s):

Public Policy ◽

Price Elasticity ◽

Forecast Accuracy ◽

Electricity Demand ◽

Recent Period ◽

Residential Sector ◽

Real Price ◽

Long Run ◽

Residential Electricity

The demand for electricity in the residential sector is estimated to have become less elastic for the recent period of rising real prices as compared to earlier periods of stable or falling real price. Several possible reasons for this are investigated and we conclude that demand appears to be asymmetric with respect to price in both the short and long run. We then examine whether or not this is an important factor for forecast accuracy and public policy.

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A Panel Data Analysis of Electricity Demand in Pakistan

THE LAHORE JOURNAL OF ECONOMICS ◽

10.35536/lje.2010.v15.isp.a5 ◽

2010 ◽

Vol 15 (Special Edition) ◽

pp. 75-106 ◽

Cited By ~ 10

Author(s):

Azam Amjad Chaudhry

Keyword(s):

Panel Data ◽

Price Elasticity ◽

Capita Income ◽

Electricity Demand ◽

Firm Level ◽

Elasticity Of Demand ◽

Price Elasticity Of Demand ◽

Level Data ◽

Firm Level Data ◽

Per Capita

This paper looks at the economy-wide demand and the firm level demand for electricity in Pakistan. The economy wide estimation of electricity demand uses panel data from 63 countries from 1998-2008, and finds that the elasticity of demand for electricity with respect to per capita income is approximately 0.69, which implies that a 1% increase in per capita income will lead to a 0.69% increase in the demand for electricity. The firm level analysis uses firm level data from the World Bank’s Enterprise Survey for Pakistan and finds that the price elasticity of demand for electricity across all firms is approximately -0.57, which implies that a 1% increase in electricity prices will lead to a 0.57% decrease in electricity demand across firms. Across sectors, the textile sector has the highest price elasticity of demand (-0.81) while the price elasticity of demand for firms in the electricity and electronics sector is the smallest (-0.31). Finally, firm level data is also used to estimate production functions in order to estimate the impact of electricity shortages on manufacturing output.

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The price elasticity of demand for pharmaceuticals amongst high-income older Australians: a natural experiment

Applied Economics ◽

10.1080/00036846.2010.498361 ◽

2011 ◽

Vol 43 (30) ◽

pp. 4835-4846 ◽

Cited By ~ 3

Author(s):

P. Siminski

Keyword(s):

Price Elasticity ◽

Natural Experiment ◽

High Income ◽

Elasticity Of Demand ◽

Price Elasticity Of Demand

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Demand Price Elasticity of Residential Electricity Consumers with Zonal Tariff Settlement Based on Their Load Profiles

Energies ◽

10.3390/en12224317 ◽

2019 ◽

Vol 12 (22) ◽

pp. 4317 ◽

Cited By ~ 6

Author(s):

Jerzy Andruszkiewicz ◽

Józef Lorenc ◽

Agnieszka Weychan

Keyword(s):

Price Elasticity ◽

Electricity Market ◽

Distribution System ◽

Peak Load ◽

Real Life ◽

Total Load ◽

Elasticity Of Demand ◽

Price Elasticity Of Demand ◽

Residential Electricity ◽

Residential Consumers

The concept of price elasticity of demand has been widely used for the assessment of the consumers’ behavior in the electricity market. As the residential consumers represent a significant percentage of the total load, price elasticity of their demand may be used to design desirable demand side response programs in order to manage peak load in a power system. The method presented in this study proposes an alternative approach towards price elasticity determination for zonal tariff users, based on comparisons of load profiles of consumers settled according to flat and time-of-use electricity tariffs. A detailed explanation of the proposed method is presented, followed by a case-study of price elasticity determination for residential electricity consumers in Poland. The forecasted values of price elasticity of demand for the Polish households using time-of-use (TOU) tariff vary between −1.7 and −2.3, depending on the consumers’ annual electricity consumption. Moreover, an efficiency study of residential zonal tariff is performed to assess the operation of currently applicable electricity tariffs. Presented analysis is based on load profiles published by Distribution System Operators and statistical data, but the method can be applied to the real-life measurements from the smart metering systems as well when such systems are accessible for residential consumers.

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