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Electricity Demand in a Northern Mexico Metropolitan Economy

Author

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  • Thomas M. Fullerton

    (Department of Economics & Finance, University of Texas at El Paso, El Paso, TX 79968-0543, USA.)

  • Ericka C. M ndez-Carrillo

    (Department of Economics & Finance, University of Texas at El Paso, El Paso, TX 79968-0543, USA)

  • Adam G. Walke

    (Department of Economics & Finance, University of Texas at El Paso, El Paso, TX 79968-0543, USA.)

Abstract

Using an error correction framework, this study analyzes the long- and short-run dynamics of electricity demand in Ciudad Juarez, a large metropolitan economy on Mexico s northern border. Demand is decomposed into the total number of electricity accounts and electricity usage per customer, each of which is modeled separately. A two-stage least squares approach is used to estimate the per customer electricity demand equations due to the endogeneity of the average price variable. The results indicate sustained growth in population, employment, and income can be expected to exert substantial upward pressure on regional electric power demand. Furthermore, demand is found to be price-inelastic in this metropolitan area, suggesting that rate increases can help raise the revenues necessary to fund expansion of the electrical grid.

Suggested Citation

  • Thomas M. Fullerton & Ericka C. M ndez-Carrillo & Adam G. Walke, 2014. "Electricity Demand in a Northern Mexico Metropolitan Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 495-505.
    • Handle: RePEc:eco:journ2:2014-04-01
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    Cited by:

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    2. Brock, Gregory & German-Soto, Vicente, 2017. "Regional industrial informality and efficiency in Mexico, 1990–2013," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 928-941.

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    More about this item

    Keywords

    Electricity Demand; Urban Economics; Applied Econometrics; Mexico;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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