Price elasticity of demand in the EPEX spot market for electricity—New empirical evidence

Werner Bönte (), Sebastian Nielen, Niyaz Valitov and Torben Engelmeyer

Economics Letters, 2015, vol. 135, issue C, 5-8

Abstract: This paper provides estimates for the price elasticity of demand in the European Power Exchange (EPEX) day-ahead market for electricity. An institutional change in the year 2010 allows us to use wind speed as an instrumental variable for hourly spot market prices in order to deal with potential endogeneity problems. The average price elasticity of demand covering the years 2010–2014 is about −0.43 and our results point to a decline in its absolute value over time.

Keywords: Demand for electricity; Price elasticity; Instrumental variable regression (search for similar items in EconPapers)
JEL-codes: D12 L94 Q41 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176515002803
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecolet:v:135:y:2015:i:c:p:5-8

DOI: 10.1016/j.econlet.2015.07.007

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().