The Anatomy of Electricity Demand: A CGE Decomposition for Norway
AbstractThe paper derives a general equilibrium demand function for electricity by imposing a specific closure rule on a large CGE-model of the Norwegian economy. By a decomposition technique it quantifies the contribution from various mechanisms to the price sensitivity of aggregate electricity demand. Specifically, it identifies the contributions from substitution at the micro level, as well as changes in the industry structure to the substitution at the aggregate level. It also separates the substitution effects of equilibrium adjustments of other prices than the electricity price, and macroeconomic income effects on total demand. The direct price elasticity of aggregate electricity demand is estimated to -0.31. Within industry factor substitution contributes most to this response.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 426.
Date of creation: Jun 2005
Date of revision:
Electricity demand; Computable general equilibrium model;
Find related papers by JEL classification:
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-15 (All new papers)
- NEP-CMP-2005-10-15 (Computational Economics)
- NEP-EEC-2005-10-15 (European Economics)
- NEP-ENE-2005-10-15 (Energy Economics)
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