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U.S. commercial electricity consumption

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  • Contreras, Sergio
  • Smith, Wm. Doyle
  • Fullerton, Thomas M., Jr.

Abstract

Commercial electricity usage exceeds that of industrial usage and is almost as large as residential electricity consumption in the United States. In this study, regional economic, demographic, and climatic data are used to analyze commercial electricity demand in the United States. Results indicate that total commercial demand for electricity is negatively related to price. In addition, the number of businesses and service income positively affect electricity demand for commercial use. The results are similar for equations estimated for kilowatt-hours demanded per business. The regional dummy variables exhibit different signs, which may occur due to climate factors because warm weather regions experience greater volumes of cooling degree-days, while cool weather regions observe larger amounts of heating degree-days. Although coefficients for the price of natural gas are positive, they do not satisfy the 5-percent significance criterion. The latter suggests that natural gas may not be a substitute good for electricity within the commercial sector of the U.S. economy.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 34855.

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Date of creation: 11 Jan 2010
Date of revision: 22 May 2011
Publication status: Published in Mountain Plains Journal of Business & Economics 1.12(2011): pp. 27-41
Handle: RePEc:pra:mprapa:34855

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Keywords: Commercial Electricity Consumption; Regional Economics;

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References

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  1. Thomas Fullerton & Roberto Tinajero & Jorge Mendoza Cota, 2007. "An Empirical Analysis of Tijuana Water Consumption," Atlantic Economic Journal, International Atlantic Economic Society, International Atlantic Economic Society, vol. 35(3), pages 357-369, September.
  2. Xiao, Ni & Zarnikau, Jay & Damien, Paul, 2007. "Testing functional forms in energy modeling: An application of the Bayesian approach to U.S. electricity demand," Energy Economics, Elsevier, Elsevier, vol. 29(2), pages 158-166, March.
  3. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, Econometric Society, vol. 48(4), pages 817-38, May.
  4. Brown, Richard E. & Koomey, Jonathan G., 2003. "Electricity use in California: past trends and present usage patterns," Energy Policy, Elsevier, Elsevier, vol. 31(9), pages 849-864, July.
  5. Shin, Jeong-Shik, 1985. "Perception of Price When Price Information Is Costly: Evidence from Residential Electricity Demand," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 591-98, November.
  6. Contreras, Sergio & Smith, Wm. Doyle & Roth, Timothy P. & Fullerton, Thomas M., Jr., 2009. "Regional Evidence regarding U.S. Residential Electricity Consumption," MPRA Paper 29093, University Library of Munich, Germany, revised 2009.
  7. Davidson, Russell & MacKinnon, James G., 1989. "Testing for Consistency using Artificial Regressions," Econometric Theory, Cambridge University Press, Cambridge University Press, vol. 5(03), pages 363-384, December.
  8. Marvin J. Horowitz, 2004. "Electricity Intensity in the Commercial Sector: Market and Public Program Effects," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Number 2), pages 115-138.
  9. Frank T. Denton & Dean C. Mountain & Byron G. Spencer, 2003. "Energy Demand with Declining Rate Schedules: An Econometric Model for the U.S. Commercial Sector," Land Economics, University of Wisconsin Press, vol. 79(1), pages 86-105.
  10. Halvorsen, Robert, 1975. "Residential Demand for Electric Energy," The Review of Economics and Statistics, MIT Press, vol. 57(1), pages 12-18, February.
  11. Badri, Masood A., 1992. "Analysis of demand for electricity in the United States," Energy, Elsevier, Elsevier, vol. 17(7), pages 725-733.
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