Price Elasticity of Electricity Revisited: A Meta-Analysis

Vojtech Sikl, Zuzana Irsova, Peter Kudela () and Anna Kudelova
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Vojtech Sikl: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague
Peter Kudela: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague
Anna Kudelova: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague

No 2025/17, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This meta-analysis synthesizes 4,521 elasticity estimates drawn from 413 studies to examine the presence of publication and endogeneity bias in the literature. We coded over 100 study-level variables to assess how electricity consumers respond to price changes. Our results show that electricity demand is price inelastic, with an average short-run elasticity of -0.231 and average long-run elasticity of -0.532. However, after correcting for publication bias, the short-run elasticity declines in magnitude to -0.116, while the long-run elasticity adjusts to -0.303. Using Bayesian model averaging, we explore substantial heterogeneity in elasticity estimates. Factors such as declining tariff structures, demographic characteristics, fuel usage controls, daylight hours, and citation frequency significantly affect reported elasticities. In contrast, variables related to average and marginal electricity prices and time-of-use tariffs contribute minimally to the observed variation.

Keywords: meta-analysis; elasticity; price elasticity; electricity; heterogeneity; publication bias; consumer sensitivity (search for similar items in EconPapers)
JEL-codes: C11 D01 Q40 Q49 (search for similar items in EconPapers)
Pages: 86 pages
Date: 2025-09, Revised 2025-09
New Economics Papers: this item is included in nep-ene, nep-eur, nep-ind and nep-reg
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