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Price and income elasticities of electricity demand: Evidence from Jamaica

Alrick Campbell

Energy Economics, 2018, vol. 69, issue C, 19-32

Abstract: Jamaica's electricity sector faces supply-side challenges. Demand-side policies have the potential to improve electricity use efficiency and reduce the likelihood of electricity disruptions. In this paper, I use the bounds testing approach to cointegration to obtain long-run price elasticity of demand estimates for the period 1970–2014. The analysis focuses on aggregate electricity demand and three categories of consumers: residential, commercial, and industrial. The findings suggest that residential and industrial consumers are most responsive to price changes, with long-run price elasticities of demand of −0.82 and −0.25, respectively. Price-based approaches are likely to be more successful in slowing electricity demand growth in these sectors.

Keywords: Bounds testing; Elasticity; Electricity demand (search for similar items in EconPapers)
JEL-codes: C22 Q41 Q43 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1016/j.eneco.2017.10.040

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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