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Price and income elasticities of electricity demand: Evidence from Jamaica

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  • Campbell, Alrick

Abstract

Jamaica's electricity sector faces supply-side challenges. Demand-side policies have the potential to improve electricity use efficiency and reduce the likelihood of electricity disruptions. In this paper, I use the bounds testing approach to cointegration to obtain long-run price elasticity of demand estimates for the period 1970–2014. The analysis focuses on aggregate electricity demand and three categories of consumers: residential, commercial, and industrial. The findings suggest that residential and industrial consumers are most responsive to price changes, with long-run price elasticities of demand of −0.82 and −0.25, respectively. Price-based approaches are likely to be more successful in slowing electricity demand growth in these sectors.

Suggested Citation

  • Campbell, Alrick, 2018. "Price and income elasticities of electricity demand: Evidence from Jamaica," Energy Economics, Elsevier, vol. 69(C), pages 19-32.
    • Handle: RePEc:eee:eneeco:v:69:y:2018:i:c:p:19-32
    DOI: 10.1016/j.eneco.2017.10.040
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    More about this item

    Keywords

    Bounds testing; Elasticity; Electricity demand;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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