Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/336464 
Year of Publication: 
2025
Series/Report no.: 
Danmarks Nationalbank Working Papers No. 214
Publisher: 
Danmarks Nationalbank, Copenhagen
Abstract: 
Real-time and time-of-use electricity pricing is based on the premise that consumers reduce demand when prices are high. In this paper, we test this assumption empirically using a large, high-frequency smart meter dataset from Denmark, estimating the short-run (hourly) price elasticity of electricity demand at the household level. Although most households show no significant responsiveness to price signals, we find that nearly one third reduce their consumption significantly when prices rise. On average, a one Danish krone increase in electricity prices leads to a 2.6% decrease in demand. By linking smart meter data to administrative records, we further examine how price responsiveness varies across socio-demographic groups. We find that the price sensitivity is higher among households with higher educational attainment and overall electricity consumption, but lower among those aged 35 to 54.
Subjects: 
Energy Demand
Prices
Energy Policy
Instrumental Variables (IV) Estimation
JEL: 
Q41
C26
Q48
Document Type: 
Working Paper

Files in This Item:
File
Size





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