Asymmetric price response of industrial electricity demand in India

Nhan Tran and Naresh Chandra Sahu

Utilities Policy, 2023, vol. 82, issue C

Abstract: This paper analyses the asymmetric effects of electricity prices on industrial electricity demand in India from 1981 to 2016 using the two-threshold nonlinear autoregressive distributed lag (NARDL) model. The results show that customers react more strongly to a large price cut than a large price increase, whereas a small price change does not affect electricity consumption. A large price decrease, which raises the quantity demanded by a higher percentage, makes it more challenging to reach net-zero emissions as electricity generation relies mainly on fossil fuels. Since demand is inelastic for price increases, a large price hike minimally reduces electricity consumption.

Keywords: Price asymmetry; Output elasticity; Electricity demand (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:82:y:2023:i:c:s0957178723000644

DOI: 10.1016/j.jup.2023.101552

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