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Estimation of price and income elasticities for the Brazilian household electricity demand

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  • Daniel de Abreu Pereira Uhr

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  • Júlia Gallego Ziero Uhr, André Luis Squarize Chagas

Abstract

This paper fills a gap in the literature on residential energy consumption in Brazil. We estimate price and income elasticities for residential electricity consumption using disaggregated data at household level for the São Paulo metropolitan area. Data were obtained from Fundação Instituto de Pesquisas Econômicas (Fipe), which has complete access to Pesquisa de Orçamento Familiar (POF). Information about residential electricity consumption and household characteristics was available at two different periods, 1998 and 2008, which enabled us to adopt panel data estimation procedures. This study is the first to use Brazilian household level data on electricity consumption and a panel approach to estimate price and income elasticities. The results show that the price elasticity ranges from -0.26 to -0.64 and the income elasticity between 0.11 and 0.32. Controlling for a variety of fixed effects, household and family characteristics, price and income elasticities for the short-run are, approximately, -0.50, and 0.21.

Suggested Citation

  • Daniel de Abreu Pereira Uhr & Júlia Gallego Ziero Uhr, André Luis Squarize Chagas, 2017. "Estimation of price and income elasticities for the Brazilian household electricity demand," Working Papers, Department of Economics 2017_12, University of São Paulo (FEA-USP).
  • Handle: RePEc:spa:wpaper:2017wpecon12
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    Keywords

    Electricity; Price elasticity; Income elasticity; Brazil; household data.;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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