How much do households repond to electricity prices? Evidence from Australia and abroad

Lorraine Conway () and David Prentice
Additional contact information
Lorraine Conway: Infrastructure Victoria

No 201901, Technical papers from Infrastructure Victoria

Abstract: In this paper we review studies to understand how much households change their electricity consumption when there is a price change. We are particularly focussed on finding results from econometric studies that estimate elasticities of demand. Many studies find residential households demonstrate responsiveness to price, with long term and short run elasticities behaving as economic theory would suggest. For instance, the elasticities are negative which means that as price increases, consumption decreases; long run elasticities are larger than shorter run elasticities which indicates that households can respond over time through investment in more energy efficient appliances; and very short run elasticities exist - while very short run elasticities are small, household responsiveness seems to increase when paired with technology. Long run elasticities range from -0.75 to -0.3 and short run elasticities range from -0.47 to -0.026. The major gaps in research from the empirical economics literature are how low income and vulnerable Australian households could be affected by price changes and how Australians respond to within-day variation in prices.

Keywords: Electricity; Prices; Elasticity; Cost reflective pricing; Australia (search for similar items in EconPapers)
JEL-codes: D12 L94 Q41 Q48 (search for similar items in EconPapers)
Date: 2019-09-26
New Economics Papers: this item is included in nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://repec.infrastructurevictoria.com.au/RePEc/inv/tpaper/IVT201901.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to repec.infrastructurevictoria.com.au:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

Related works:
Journal Article: How Much do Households Respond to Electricity Prices? Evidence from Australia and Abroad (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inv:tpaper:201901

Access Statistics for this paper

More papers in Technical papers from Infrastructure Victoria Contact information at EDIRC.
Bibliographic data for series maintained by Llewellyn Reynders ().