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The hourly income elasticity of electricity

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  • Vesterberg, Mattias

Abstract

Using a detailed data set on appliance-level electricity consumption at the hourly level, we provide the first estimates of hourly and end-use-specific income elasticities for electricity. Such estimates are informative about how consumption patterns in general, and peak demand in particular, will develop as households' income changes. We find that the income elasticities are highest during peak hours for kitchen and lighting, with point estimates of roughly 0.4, but insignificant for space heating.

Suggested Citation

  • Vesterberg, Mattias, 2016. "The hourly income elasticity of electricity," Energy Economics, Elsevier, vol. 59(C), pages 188-197.
    • Handle: RePEc:eee:eneeco:v:59:y:2016:i:c:p:188-197
    DOI: 10.1016/j.eneco.2016.08.014
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    References listed on IDEAS

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    Cited by:

    1. Wang, Li & Zhang, Xin-Hua & Zhang, Yue-Jun, 2023. "Designing the pricing mechanism of residents’ self-selection sales electricity based on household size," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 860-878.
    2. Batlle, Carlos & Mastropietro, Paolo & Rodilla, Pablo, 2020. "Redesigning residual cost allocation in electricity tariffs: A proposal to balance efficiency, equity and cost recovery," Renewable Energy, Elsevier, vol. 155(C), pages 257-266.
    3. Vesterberg, Mattias, 2017. "Heterogeneity in price responsiveness of electricity: Contract choice and the role of media coverage," Umeå Economic Studies 940, Umeå University, Department of Economics.
    4. Krishnamurthy, Chandra Kiran B. & Vesterberg, Mattias & Böök, Herman & Lindfors, Anders V. & Svento, Rauli, 2018. "Real-time pricing revisited: Demand flexibility in the presence of micro-generation," Energy Policy, Elsevier, vol. 123(C), pages 642-658.
    5. Lin, Boqiang & Wang, Yao, 2020. "Analyzing the elasticity and subsidy to reform the residential electricity tariffs in China," International Review of Economics & Finance, Elsevier, vol. 67(C), pages 189-206.
    6. Tomasz Rokicki & Piotr Bórawski & Barbara Gradziuk & Piotr Gradziuk & Aldona Mrówczyńska-Kamińska & Joanna Kozak & Danuta Jolanta Guzal-Dec & Kamil Wojtczuk, 2021. "Differentiation and Changes of Household Electricity Prices in EU Countries," Energies, MDPI, vol. 14(21), pages 1-21, October.
    7. Jansson, Evelina, 2025. "The impact of Electric Vehicle adoption on residential electricity consumption: Insights from Sweden," Energy Economics, Elsevier, vol. 152(C).
    8. Koch, Steven F. & Nkuna, Blessings & Ye, Yuxiang, 2024. "Income elasticity of residential electricity consumption in rural South Africa," Energy Economics, Elsevier, vol. 131(C).
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    10. Ghoddusi, Hamed & Rodivilov, Alexander & Roy, Mandira, 2021. "Income elasticity of demand versus consumption: Implications for energy policy analysis," Energy Economics, Elsevier, vol. 95(C).

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    Keywords

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    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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