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The Elasticity of Electricity Demand and Carbon Emissions Reductions in the Residential Sector: Evidence from a Tariff Shift in Russia

Author

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  • Salim Turdaliev

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)

Abstract

In this paper, I estimate the price elasticity of residential electricity demand using household-level panel data for Russia. The study takes advantage of the variation in tariffs across regions and over time, as well as the introduction of increasing block rate (IBR) tariff schemes in a number of regions. I show that in those regions consumers appear to be aware of the block cut-offs, even though the latter are household and dwelling-specific, to the point that there are a total of 35 different tier cut-offs. Based on these results, I estimate the price elasticity of electricity demand to be around -0.09. I also predict the associated changes in electricity consumption, CO2 emissions, and revenues if similar IBR policies are implemented countrywide.

Suggested Citation

  • Salim Turdaliev, 2021. "The Elasticity of Electricity Demand and Carbon Emissions Reductions in the Residential Sector: Evidence from a Tariff Shift in Russia," Working Papers IES 2021/07, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Dec 2021.
    • Handle: RePEc:fau:wpaper:wp2021_37
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    File URL: https://ies.fsv.cuni.cz/en/veda-vyzkum/working-papers/6569
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    More about this item

    Keywords

    residential electricity demand; transition economy; natural experiment; increasing block rates; attentiveness; CO2 emissions;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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