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Determinants of Residential end-use electricity demand: Evidence from Sweden

Author

Listed:
  • Vesterberg, Mattias

    (Department of Economics, Umeå School of Business and Economics)

  • Kiran B. Krishnamurthy, Chandra

    (Beijer Institute of Ecological Economics, The Royal Academy of Sciences)

  • Bayrak, Oben

    (Department of Forest Economics, SLU)

Abstract

Using a household appliance metering data set from the Swedish Energy Agency, this paper focuses on understanding the determinants of end-use electricity demand for Sweden. The focal point of the analysis is the estimation of end-use-specific income elasticity of electricity demand, for the first time for Sweden. A seemingly unrelated regression framework is used for understanding the determinants of end-use demand, with the end-uses being heating, kitchen, lighting, and residual. The main results of the analysis are: high aggregate elasticity (above 0.6), and very high income elasticity of electric heating (above 0.8). Other size-related variables (size of home, number of people) do not appear to have significant explanatory power. Overall, our analysis indicates that income is a key factor determining the demand for electricity, and to a much larger extent than usually considered.

Suggested Citation

  • Vesterberg, Mattias & Kiran B. Krishnamurthy, Chandra & Bayrak, Oben, 2015. "Determinants of Residential end-use electricity demand: Evidence from Sweden," Umeå Economic Studies 910, Umeå University, Department of Economics.
  • Handle: RePEc:hhs:umnees:0910
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    Keywords

    Direct Metering; Residential Electricity Demand; income elasticity;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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