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Recent Evidence on Residential Electricity Consumption Determinants: A Panel Two-Stage Least Squares Analysis, 2001-2005

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  • Cebula, Richard
  • Herder, Nate

Abstract

This empirical study seeks to provide evidence identifying key factors that have influenced per residential customer electricity consumption in the U.S. during recent years. This empirical analysis takes the form of P2SLS (panel two-stage least squares) estimations. State-level data are adopted for the five-year period from 2001 through 2005. The P2SLS findings indicate that the annual consumption of electricity per residential customer is an increasing function of the annual number of cooling degree days, real per capita personal disposable income, and the real unit price of natural gas. Annual per residential customer electricity consumption is also found to be a decreasing function of the real unit price of electricity and the extent of usage of natural gas for residential heating, as well as the degree to which each state has pursued energy efficiency policies. Finally, said consumption is also found to be positively a function of a control variable measuring peak summer electricity generating capacity.

Suggested Citation

  • Cebula, Richard & Herder, Nate, 2009. "Recent Evidence on Residential Electricity Consumption Determinants: A Panel Two-Stage Least Squares Analysis, 2001-2005," MPRA Paper 56741, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:56741
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    References listed on IDEAS

    as
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    Cited by:

    1. Thomas M. Fullerton & Ileana M. Resendez & Adam G. Walke, 2015. "Upward Sloping Demand for a Normal Good? Residential Electricity in Arkansas," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 1065-1072.

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    More about this item

    Keywords

    residential electricity consumption; electricity prices; natural gas prices; income; cooling degree days;
    All these keywords.

    JEL classification:

    • J29 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Other
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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