An experiment in own-price elasticity estimation for non-residential electricity demand in the U.S.

K. H. Cao, H. S. Qi, R. Li, C. K. Woo, A. Tishler, J. Zarnikau*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper uses an experiment to identify what modeling decisions significantly affect estimates of own-price elasticity for non-residential (commercial and industrial) electricity demand in the United States (U.S.). Based on 174,240 panel data model runs involving 10,944 monthly state-level observations from the Energy Information Administration for 2001–2019, these decisions are parametric specification, estimation method, and treatment of cross-section dependence. As most of the many generated elasticity estimates are between 0.0 and −0.2, price-induced conservation is likely modest, thus justifying continued policy support for energy efficiency standards and demand-side management in the U.S. path to deep decarbonization.

Original languageEnglish
Article number101489
JournalUtilities Policy
Volume81
DOIs
StatePublished - Apr 2023

Funding

FundersFunder number
Education University of Hong Kong

    Keywords

    • Estimation experiment
    • Non-residential electricity demand
    • Price elasticity
    • U.S

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