Response of residential electricity demand to price: The effect of measurement error

Anna Alberini, M. Filippini

Research output: Contribution to journalArticle

105 Citations (Scopus)

Abstract

In this paper we present an empirical analysis of the residential demand for electricity using annual aggregate data at the state level for 48 US states from 1995 to 2007. Earlier literature has examined residential energy consumption at the state level using annual or monthly data, focusing on the variation in price elasticities of demand across states or regions, but has failed to recognize or address two major issues. The first is that, when fitting dynamic panel models, the lagged consumption term in the right-hand side of the demand equation is endogenous. This has resulted in potentially inconsistent estimates of the long-run price elasticity of demand. The second is that energy price is likely mismeasured.
Original languageEnglish
Pages (from-to)889-895
Number of pages7
JournalEnergy Economics
Volume33
Issue number5
DOIs
Publication statusPublished - Sep 2011

ASJC Scopus subject areas

  • Economics and Econometrics
  • Energy(all)

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