Price Elasticity of Electricity Demand in France
Stéphane Auray,
Vincenzo Caponi and
Benoît Ravel
Economie et Statistique / Economics and Statistics, 2019, issue 513, 91-103
Abstract:
[eng] Competition and climate becoming more important for electricity production and consumption, market operators are increasingly interested in reliable forecasts of electricity prices and consumption for planning their investments and regulating policies. Key for good forecasts is understanding the consumers’ reaction to price changes, synthesized by the concept of elasticity. Using a unique dataset of millions of bi-annual meter readings of electricity consumption in France from 2007 to 2015, we estimate the price elasticity of electricity expenditure of private households. We propose three specifications: a canonical one that regresses electricity consumption on a price per kilowatt/hour, where we find an elasticity equal to -0.8, a result remarkably in line and corroborating previous literature; a specification that follows Filippini’s (1995) model of an Almost Ideal Demand System (AIDS), in which we substantially replicate his results; and finally, an extension of the latter that allows elasticities to be season-dependent that shows the demand of electricity being more elastic in summer.
JEL-codes: C5 D12 Q4 Q41 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)
Downloads: (external link)
https://www.insee.fr/en/statistiques/fichier/4467135/ES_513_Auray_EN.pdf (application/pdf)
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:nse:ecosta:ecostat_2019_513_5
DOI: 10.24187/ecostat.2019.513.2002
Access Statistics for this article
Economie et Statistique / Economics and Statistics is currently edited by Dominique Goux
More articles in Economie et Statistique / Economics and Statistics from Institut National de la Statistique et des Etudes Economiques (INSEE) Contact information at EDIRC.
Bibliographic data for series maintained by Veronique Egloff ().