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On Price Elasticity of Electicity Demand

M. Kukoverov
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M. Kukoverov: Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia

Journal of the New Economic Association, 2019, vol. 42, issue 2, 70-92

Abstract: The paper provides the econometric estimates of short-run and long-run price elasticities of electricity demand for different categories of customers. Both for residential and for non-residential sectors the estimates (in absolute value) of short-run price elasticity are low, while the estimates of long-run price elasticity are high. Consequently, long-run projections of electricity demand under expectations of increase of energy prices should take into account the long-run price elasticity. The estimates of short-run price elasticity for non-residential sector can be used in models of imperfect competition in the electricity market, under a number of assumptions, such as the absence or weak attention of the regulator, when possible strategies of economic agents (such as electricity suppliers in the spot market) may depend on the short-run price elasticity of demand.

Keywords: electricity demand; price elasticity of demand; sectoral planning; capacity excess in UPS; operations research; econometric estimation (search for similar items in EconPapers)
JEL-codes: C44 L52 L94 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.31737/2221-2264-2019-42-2-4

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