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Estimando la Demanda Residencial por Electricidad en Chile: El Consumo es Sensible al Precio

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Author Info
José Miguel Benavente
Alexander Galetovic
Ricardo Sanhueza
Pablo Serra

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Abstract

We estimate the demand for electricity by households in Chile. We use a monthly panel of 18 distribution companies, which starts in January 1995 and runs through december 2001. The one-month price elasticity of demand is -0.0548 and -0,39 in the long run. That is, if tariffs rise permanently by 10% today, consumption falls by 0,548% next month and 3,9% in the long run. With two practical examples we show that these elasticities are "large" economically. The metholodogical contribution of the paper is a method to estimate dynamic panels with monthly data, and protracted adjustment processes when both the number of individuals and periods is "small".

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Publisher Info
Article provided by Instituto de Economía. Pontificia Universidad Católica de Chile. in its journal Cuadernos de Economía.

Volume (Year): 42 (2005)
Issue (Month): 125 ()
Pages: 31-61
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Handle: RePEc:ioe:cuadec:v:42:y:2005:i:125:p:31-61

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Related research
Keywords: Dynamic Panels; Elasticity; Montecarlo; Seasonality;

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Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. John A. Nordin, 1976. "A Proposed Modification of Taylor's Demand Analysis: Comment," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 719-721, Autumn. [Downloadable!] (restricted)
  2. Lester D. Taylor, 1975. "The Demand for Electricity: A Survey," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 74-110, Spring. [Downloadable!] (restricted)
  3. Rómulo Chumacero & Ricardo Paredes & José Miguel Sánchez, 2000. "Regulación para Crisis de Abastecimiento: Lecciones del Racionamiento Eléctrico en Chile," Cuadernos de Economía (Latin American Journal of Economics), Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 37(111), pages 323-338. [Downloadable!]
  4. Murray, Michael P, et al, 1978. "The Demand for Electricity in Virginia," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 585-600, November. [Downloadable!] (restricted)
  5. Chang, Hui S & Hsing, Yu, 1991. "The Demand for Residential Electricity: New Evidence on Time-Varying Elasticities," Applied Economics, Taylor and Francis Journals, vol. 23(7), pages 1251-56, July.
  6. Maddala, G S, et al, 1997. "Estimation of Short-Run and Long-Run Elasticities of Energy Demand from Panel Data Using Shrinkage Estimators," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(1), pages 90-100, January.
  7. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August. [Downloadable!] (restricted)
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  8. Donatos, George S. & Mergos, George J., 1991. "Residential demand for electricity: The case of Greece," Energy Economics, Elsevier, vol. 13(1), pages 41-47, January. [Downloadable!] (restricted)
  9. Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July. [Downloadable!] (restricted)
  10. Westley, Glenn D, 1984. "Electricity Demand in a Developing Country," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 459-67, August. [Downloadable!] (restricted)
  11. Ahn, Seung C. & Schmidt, Peter, 1995. "Efficient estimation of models for dynamic panel data," Journal of Econometrics, Elsevier, vol. 68(1), pages 5-27, July. [Downloadable!] (restricted)
  12. Frank Windmeijer, 2000. "A finite sample correction for the variance of linear two-step GMM estimators," IFS Working Papers W00/19, Institute for Fiscal Studies. [Downloadable!]
  13. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July. [Downloadable!] (restricted)
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  14. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
  15. Ernst R. Berndt & G. Campbell Watkins, 1977. "Demand for Natural Gas: Residential and Commercial Markets in Ontario and British Columbia," Canadian Journal of Economics, Canadian Economics Association, vol. 10(1), pages 97-111, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Claudio Bravo Ortega & Álvaro García Marín, 2008. "Exploring the Relationship Between R&D and Productivity: A Country-Level Study," Working Papers Central Bank of Chile 472, Central Bank of Chile. [Downloadable!]
  2. José Miguel Benavente & Alexander Galetovic & Ricardo Sanhueza & Pablo Serra, 2005. "El costo de la falla residencial en Chile: una estimación usando la curva de demanda," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Economics Department, vol. 20(2), pages 23-40, December. [Downloadable!]
  3. Francisco Caravia & Eduardo Saavedra, 2005. "Subastando la Energía para Clientes Regulados: Un Análisis de Equilibrio," ILADES-Georgetown University Working Papers inv169, Ilades-Georgetown University, School of Economics and Bussines. [Downloadable!]
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