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The long-run price elasticity of residential demand for electricity: Results from a natural experiment

James Feehan

Utilities Policy, 2018, vol. 51, issue C, 12-17

Abstract: In one of two otherwise similar adjacent regions in a Canadian province, the price of electricity changed abruptly, substantially, and permanently. That natural experiment allows for a simple differences-in-differences calculation of the long-run price elasticity of residential demand for electricity. This analysis is of interest for two reasons. First, it is a rare circumstance when such a methodology can be used. Secondly, the magnitude of the elasticity estimate has substantial implications for utilities, regulators, and policymakers.

Keywords: Residential demand for electricity; Price elasticity; Difference-in-differences (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:juipol:v:51:y:2018:i:c:p:12-17