NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

The Long-Run Dynamics of Electricity Demand: Evidence from Municipal Aggregation

Tatyana Deryugina, Alexander MacKay, Julian Reif

NBER Working Paper No. 23483
Issued in June 2017, Revised in November 2018
NBER Program(s):Environment and Energy Economics, Industrial Organization, Public Economics

We study the dynamics of residential electricity demand by exploiting a natural experiment that produced large and long-lasting price changes in over 250 Illinois communities. Using a flexible difference-in-differences matching approach, we estimate that the price elasticity of demand grows from –0:09 in the first six months to –0:27 two years later. We also estimate a more sophisticated model in which usage is a function of past and future prices, and we find similar elasticity patterns. Our findings highlight the importance of accounting for consumption dynamics when evaluating energy policy.

download in pdf format
   (1010 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23483

Users who downloaded this paper also downloaded* these:
Hortaçsu, Luco, Puller, and Zhu w23526 Does Strategic Ability Affect Efficiency? Evidence from Electricity Markets
García, Heckman, Leaf, and Prados w23479 Quantifying the Life-cycle Benefits of a Prototypical Early Childhood Program
Fowlie, Wolfram, Spurlock, Todd, Baylis, and Cappers w23553 Default Effects and Follow-On Behavior: Evidence from an Electricity Pricing Program
Allcott and Greenstone w23386 Measuring the Welfare Effects of Residential Energy Efficiency Programs
Caron, Fally, and Markusen w23482 Per Capita Income and the Demand for Skills
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us