The Elasticity of Electricity Demand and Carbon Emissions Reductions in the Residential Sector: Evidence from a Tariff Shift in Russia

Salim Turdaliev

No 2021/07, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: In this paper, I estimate the price elasticity of residential electricity demand using household-level panel data for Russia. The study takes advantage of the variation in tariffs across regions and over time, as well as the introduction of increasing block rate (IBR) tariff schemes in a number of regions. I show that in those regions consumers appear to be aware of the block cut-offs, even though the latter are household and dwelling-specific, to the point that there are a total of 35 different tier cut-offs. Based on these results, I estimate the price elasticity of electricity demand to be around -0.09. I also predict the associated changes in electricity consumption, CO2 emissions, and revenues if similar IBR policies are implemented countrywide.

Keywords: residential electricity demand; transition economy; natural experiment; increasing block rates; attentiveness; CO2 emissions (search for similar items in EconPapers)
JEL-codes: L94 L98 Q41 Q48 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2021-12, Revised 2021-12
New Economics Papers: this item is included in nep-cis, nep-ene, nep-env, nep-reg and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2021_37

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