Recent Evidence on Residential Electricity Consumption Determinants: A Panel Two-Stage Least Squares Analysis, 2001-2005

Richard Cebula () and Nate Herder

MPRA Paper from University Library of Munich, Germany

Abstract: This empirical study seeks to provide evidence identifying key factors that have influenced per residential customer electricity consumption in the U.S. during recent years. This empirical analysis takes the form of P2SLS (panel two-stage least squares) estimations. State-level data are adopted for the five-year period from 2001 through 2005. The P2SLS findings indicate that the annual consumption of electricity per residential customer is an increasing function of the annual number of cooling degree days, real per capita personal disposable income, and the real unit price of natural gas. Annual per residential customer electricity consumption is also found to be a decreasing function of the real unit price of electricity and the extent of usage of natural gas for residential heating, as well as the degree to which each state has pursued energy efficiency policies. Finally, said consumption is also found to be positively a function of a control variable measuring peak summer electricity generating capacity.

Keywords: residential electricity consumption; electricity prices; natural gas prices; income; cooling degree days (search for similar items in EconPapers)
JEL-codes: J29 Q41 Q42 Q47 Q54 Q56 (search for similar items in EconPapers)
Date: 2009-02-28
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Citations: View citations in EconPapers (1)

Published in Research in Business and Economics Journal 1.2(2010): pp. 4-10

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