IDEAS home Printed from https://ideas.repec.org/a/aen/journl/ej42-2-byrne.html
   My bibliography  Save this article

An Experimental Study of Monthly Electricity Demand (In)elasticity

Author

Listed:
  • David P. Byrne, Andrea La Nauze, and Leslie A. Martin

Abstract

We document substantial rigidity in household electricity demand in response to large price shocks. We partnered with an electricity retailer to run a field experiment in which randomly-selected households received discounts of up to 50% on their total electricity bill or up to 95% off their per unit cost of electricity for a full month. We show that the quantity of electricity consumed was unaffected by these discounts. Exploiting rich billing, smart meter, and survey data, we document responses that are much more inelastic than previously observed in scenarios that raise prices for a few hours or raise or lower prices for indefinitely-long periods of time. Our results hold even among subgroups that we ex-ante believed were most likely to respond.

Suggested Citation

  • David P. Byrne, Andrea La Nauze, and Leslie A. Martin, 2021. "An Experimental Study of Monthly Electricity Demand (In)elasticity," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 205-222.
    • Handle: RePEc:aen:journl:ej42-2-byrne
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=3633
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Simshauser, Paul, 2021. "Vulnerable households and fuel poverty: Measuring the efficiency of policy targeting in Queensland," Energy Economics, Elsevier, vol. 101(C).
    2. Li, Raymond & Woo, Chi-Keung & Cox, Kevin, 2021. "How price-responsive is residential retail electricity demand in the US?," Energy, Elsevier, vol. 232(C).
    3. Adélaïde Fadhuile & Daniel Llerena & Béatrice Roussillon, 2023. "Intrinsic motivation to promote the development of renewable energy: a field experiment from household demand," Working Papers 2023-01, Grenoble Applied Economics Laboratory (GAEL).
    4. Simshauser, Paul, 2023. "The 2022 energy crisis: Fuel poverty and the impact of policy interventions in Australia's National Electricity Market," Energy Economics, Elsevier, vol. 121(C).
    5. Simshauser, P., 2021. "Vulnerable households and fuel poverty: policy targeting efficiency in Australia’s National Electricity Market," Cambridge Working Papers in Economics 2129, Faculty of Economics, University of Cambridge.
    6. Lorraine Conway & David Prentice, 2020. "How Much do Households Respond to Electricity Prices? Evidence from Australia and Abroad," Economic Papers, The Economic Society of Australia, vol. 39(3), pages 290-311, September.
    7. Ding Du & Stephen A Karolyi, 2023. "Energy Transitions and Household Finance: Evidence from U.S. Coal Mining," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 12(4), pages 723-760.
    8. Cao, K.H. & Qi, H.S. & Li, R. & Woo, C.K. & Tishler, A. & Zarnikau, J., 2023. "An experiment in own-price elasticity estimation for non-residential electricity demand in the U.S," Utilities Policy, Elsevier, vol. 81(C).

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aen:journl:ej42-2-byrne. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Williams (email available below). General contact details of provider: https://edirc.repec.org/data/iaeeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.