Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171666
Authors: 
Miller, Mark
Alberini, Anna
Year of Publication: 
2015
Series/Report no.: 
Economics Working Paper Series 15/223
Abstract: 
Price elasticity estimates of residential electricity demand vary widely across the economic literature. In this paper, we seek to explain these findings using three nationwide datasets – the American Housing Survey, Forms EIA-861, and the Residential Energy Consumption Survey – from the U.S. We examine the role of the sample period, level of aggregation, use of panel data, use of instrumental variables, and inclusion of housing characteristics and capital stock. Our findings suggest that price elasticities have remained relatively constant over time. Upon splitting our panel datasets into annual cross sections, we do observe a negative relationship between price elasticities and the price variance. Whether prices are rising or falling appears to have little effect on our estimates. We also find that aggregating our data generally produces lower price elasticity estimates, as does controlling for unit level fixed effects when using panel data. Addressing the endogeneity of price and/or measurement error in price with instrumental variables has a small but noticeable effect on the price elasticities. Finally, controlling for housing characteristics and capital stock produces a lower price elasticity.
Subjects: 
residential electricity demand
price elasticity of demand
household-level data
rebound effect
energy demand forecast
JEL: 
Q41
D12
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
955.79 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.