Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249220 
Year of Publication: 
2021
Series/Report no.: 
Texto para Discussão No. 2702
Publisher: 
Instituto de Pesquisa Econômica Aplicada (IPEA), Brasília
Abstract (Translated): 
This paper investigates the price elasticity of Brazilian residential electricity demand for 2012-2016. The estimations use random and fixed effects panel data and impulse response function in a VAR/VECM model for time series analysis. Furthermore, we analyze the consumers in two categories, Low Income consumer and B1 consumer (household electricity average consumer). The most relevant contribution of this research is the analysis of the different kinds of consumers and the impact of change in electric power prices on these consumers. The results of the panel estimation are lower than the unity and have a negative relation on the consumption for positive changes in prices. The results show that, for the average consumer, the response of price change is less relevant than to lower income consumers. In the impulse response function, we can see the lower income consumers respond faster than the average consumers. Moreover in impulse response function, for electricity price change the response is more drastically negative. We can infer from these results, that the impact of a price change in elasticity is more sensitive in consumers that have a lower income and lower electricity consumption. However, an average consumer, which has a higher electricity demand, the relation between changes in prices and changes in consumption is more inelastic. This occurs, we suppose, because electricity is a most necessary good and also a smaller share of the consumption basket for the average consumer. The study also presents an estimate for the income elasticity of demand for electricity in Brazil, which, although it does not differentiate consumers by income brackets, shows a positive, inelastic relationship with a high correlation between the wages of families and their consumption of energy, which can be used for the formulation and evaluation of sectoral policies.
Subjects: 
household electricity
price and income elasticity of demand
panel data
VAR difference in consumption
JEL: 
D12
Q41
C12
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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