Short- and long-run time-of-use price elasticities in Swiss residential electricity demand
AbstractThis paper presents an empirical analysis on the residential demand for electricity by time-of-day. This analysis has been performed using aggregate data at the city level for 22 Swiss cities for the period 2000â2006. For this purpose, we estimated two log-log demand equations for peak and off-peak electricity consumption using static and dynamic partial adjustment approaches. These demand functions were estimated using several econometric approaches for panel data, for example LSDV and RE for static models, and LSDV and corrected LSDV estimators for dynamic models. The attempt of this empirical analysis has been to highlight some of the characteristics of the Swiss residential electricity demand. The estimated short-run own price elasticities are lower than 1, whereas in the long-run these values are higher than 1. The estimated short-run and long-run cross-price elasticities are positive. This result shows that peak and off-peak electricity are substitutes. In this context, time differentiated prices should provide an economic incentive to customers so that they can modify consumption patterns by reducing peak demand and shifting electricity consumption from peak to off-peak periods.
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Bibliographic InfoArticle provided by Elsevier in its journal Energy Policy.
Volume (Year): 39 (2011)
Issue (Month): 10 (October)
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Web page: http://www.elsevier.com/locate/enpol
Residential electricity demand by time-of-use Panel data Partial adjustment model;
Other versions of this item:
- Massimo Filippini, 2010. "Short and long-run time-of-use price elasticities in Swiss residential electricity demand," CEPE Working paper series 10-76, CEPE Center for Energy Policy and Economics, ETH Zurich.
- D - Microeconomics
- D2 - Microeconomics - - Production and Organizations
- Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
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