IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v36y2011i2p1115-1123.html
   My bibliography  Save this article

Electricity demand price elasticity in China based on computable general equilibrium model analysis

Author

Listed:
  • He, Y.X.
  • Yang, L.F.
  • He, H.Y.
  • Luo, T.
  • Wang, Y.J.

Abstract

Based on the CGE model, this paper simulates the impact of electricity price adjustment on demand for electricity, and the simulation results show the range of electricity elasticities of different consumers. The elasticities of the high power-consuming sectors are relatively larger. However, the absolute values of the price elasticities are less than one. Furthermore, this paper quantitatively analyses the price elasticity of different categories of users, which are classified according to the objectives of China’s electricity price reform. The elasticity absolute value of Industry & Commerce is around 0.018, that of Residents is around 0.300 and that of Agriculture is around 0.066. Finally, the price elasticities of different consumers in 2005 and 2007 are calculated through the CGE model, and it is discovered that the price elasticity absolute values in 2007 are less than that in 2005. The analytical results of this paper can provide corresponding support for the formulation of electricity pricing mechanisms for the developing countries.

Suggested Citation

  • He, Y.X. & Yang, L.F. & He, H.Y. & Luo, T. & Wang, Y.J., 2011. "Electricity demand price elasticity in China based on computable general equilibrium model analysis," Energy, Elsevier, vol. 36(2), pages 1115-1123.
    • Handle: RePEc:eee:energy:v:36:y:2011:i:2:p:1115-1123
    DOI: 10.1016/j.energy.2010.11.038
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544210006869
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2010.11.038?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bose, Ranjan Kumar & Shukla, Megha, 1999. "Elasticities of electricity demand in India," Energy Policy, Elsevier, vol. 27(3), pages 137-146, March.
    2. Al-Faris, Abdul Razak F., 2002. "The demand for electricity in the GCC countries," Energy Policy, Elsevier, vol. 30(2), pages 117-124, January.
    3. Urga, Giovanni & Walters, Chris, 2003. "Dynamic translog and linear logit models: a factor demand analysis of interfuel substitution in US industrial energy demand," Energy Economics, Elsevier, vol. 25(1), pages 1-21, January.
    4. Pindyck, Robert S, 1979. "Interfuel Substitution and the Industrial Demand for Energy: An International Comparison," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 169-179, May.
    5. Athukorala, P.P.A Wasantha & Wilson, Clevo, 2010. "Estimating short and long-term residential demand for electricity: New evidence from Sri Lanka," Energy Economics, Elsevier, vol. 32(Supplemen), pages 34-40, September.
    6. Hanley, Nick D. & McGregor, Peter G. & Swales, J. Kim & Turner, Karen, 2006. "The impact of a stimulus to energy efficiency on the economy and the environment: A regional computable general equilibrium analysis," Renewable Energy, Elsevier, vol. 31(2), pages 161-171.
    7. -, 2006. "The Hong Kong Conference: An assessment," Comercio Internacional 35972, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    8. Athukorala, P.P.A Wasantha & Wilson, Clevo, 2010. "Estimating short and long-term residential demand for electricity: New evidence from Sri Lanka," Energy Economics, Elsevier, vol. 32(Supplemen), pages 34-40, September.
    9. Zhai, Fan & Hertel, Thomas, 2005. "Impacts of the Doha Development Agenda on China : the role of labor markets and complementary education reforms," Policy Research Working Paper Series 3702, The World Bank.
    10. Hosoe, Nobuhiro & Akiyama, Shu-ichi, 2009. "Regional electric power demand elasticities of Japan's industrial and commercial sectors," Energy Policy, Elsevier, vol. 37(11), pages 4313-4319, November.
    11. Matsukawa Isamu & Madono Seishi & Nakashima Takako, 1993. "An Empirical Analysis of Ramsey Pricing in Japanese Electric Utilities," Journal of the Japanese and International Economies, Elsevier, vol. 7(3), pages 256-276, September.
    12. Dirk Willenbockel, 2006. "Structural Effects of a Real Exchange Rate Revaluation in China: a CGE Assessment," EcoMod2006 272100102, EcoMod.
    13. Lean, Hooi Hooi & Smyth, Russell, 2010. "Multivariate Granger causality between electricity generation, exports, prices and GDP in Malaysia," Energy, Elsevier, vol. 35(9), pages 3640-3648.
    14. Li, Y. & Flynn, P.C., 2006. "Electricity deregulation, spot price patterns and demand-side management," Energy, Elsevier, vol. 31(6), pages 908-922.
    15. Narayan, Paresh Kumar & Smyth, Russell & Prasad, Arti, 2007. "Electricity consumption in G7 countries: A panel cointegration analysis of residential demand elasticities," Energy Policy, Elsevier, vol. 35(9), pages 4485-4494, September.
    16. Nguyen, Hang T. & Nabney, Ian T., 2010. "Short-term electricity demand and gas price forecasts using wavelet transforms and adaptive models," Energy, Elsevier, vol. 35(9), pages 3674-3685.
    17. Hisnanick, John J. & Kyer, Ben L., 1995. "Assessing a disaggregated energy input : Using confidence intervals around translog elasticity estimates," Energy Economics, Elsevier, vol. 17(2), pages 125-132, April.
    18. Robinson, Sherman & Yunez-Naude, Antonio & Hinojosa-Ojeda, Raul & Lewis, Jeffrey D. & Devarajan, Shantayanan, 1999. "From stylized to applied models:: Building multisector CGE models for policy analysis," The North American Journal of Economics and Finance, Elsevier, vol. 10(1), pages 5-38.
    19. Zarnikau, J. & Landreth, G. & Hallett, I. & Kumbhakar, S.C., 2007. "Industrial customer response to wholesale prices in the restructured Texas electricity market," Energy, Elsevier, vol. 32(9), pages 1715-1723.
    20. Jones, Clifton T, 1995. "A Dynamic Analysis of Interfuel Substitution in U.S. Industrial Energy Demand," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(4), pages 459-465, October.
    21. Tan, Zhongfu & Zhang, Jinliang & Wang, Jianhui & Xu, Jun, 2010. "Day-ahead electricity price forecasting using wavelet transform combined with ARIMA and GARCH models," Applied Energy, Elsevier, vol. 87(11), pages 3606-3610, November.
    22. Kamerschen, David R. & Porter, David V., 2004. "The demand for residential, industrial and total electricity, 1973-1998," Energy Economics, Elsevier, vol. 26(1), pages 87-100, January.
    23. Narayan, Paresh Kumar & Smyth, Russell, 2005. "The residential demand for electricity in Australia: an application of the bounds testing approach to cointegration," Energy Policy, Elsevier, vol. 33(4), pages 467-474, March.
    24. Allan, Grant & Hanley, Nick & McGregor, Peter & Swales, Kim & Turner, Karen, 2007. "The impact of increased efficiency in the industrial use of energy: A computable general equilibrium analysis for the United Kingdom," Energy Economics, Elsevier, vol. 29(4), pages 779-798, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haitao Yin & Hui Zhou & Kai Zhu, 2016. "Long- and short-run elasticities of residential electricity consumption in China: a partial adjustment model with panel data," Applied Economics, Taylor & Francis Journals, vol. 48(28), pages 2587-2599, June.
    2. Khan, Muhammad Arshad & Abbas, Faisal, 2016. "The dynamics of electricity demand in Pakistan: A panel cointegration analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1159-1178.
    3. Masike, Kabelo & Vermeulen, Cobus, 2022. "The time-varying elasticity of South African electricity demand," Energy, Elsevier, vol. 238(PC).
    4. Tiwari, Aviral Kumar & Menegaki, Angeliki N., 2019. "A time varying approach on the price elasticity of electricity in India during 1975–2013," Energy, Elsevier, vol. 183(C), pages 385-397.
    5. Bernstein, Ronald & Madlener, Reinhard, 2011. "Responsiveness of Residential Electricity Demand in OECD Countries: A Panel Cointegation and Causality Analysis," FCN Working Papers 8/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    6. Sun, Chuanwang & Lin, Boqiang, 2013. "Reforming residential electricity tariff in China: Block tariffs pricing approach," Energy Policy, Elsevier, vol. 60(C), pages 741-752.
    7. Cialani, Catia & Mortazavi, Reza, 2018. "Household and industrial electricity demand in Europe," Energy Policy, Elsevier, vol. 122(C), pages 592-600.
    8. M.Adetunji BABATUNDE & M.Isa SHAUIBU, 2011. "The Demand for Residential Electricity in Nigeria," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 21, pages 1-13.
    9. World Bank, 2011. "A New Slant on Slopes : Measuring the Benefits of Increased Electricity Access in Developing Countries," World Bank Publications - Reports 2742, The World Bank Group.
    10. Bhattacharyya, Subhes C. & Timilsina, Govinda R., 2010. "Modelling energy demand of developing countries: Are the specific features adequately captured?," Energy Policy, Elsevier, vol. 38(4), pages 1979-1990, April.
    11. Mudassir Zaman & Farzana Shaheen & Azad Haider & Sadia Qamar, 2015. "Examining Relationship between Electricity Consumption and its Major Determinants in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 998-1009.
    12. Akihiro Otsuka, 2015. "Demand for industrial and commercial electricity: evidence from Japan," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 4(1), pages 1-11, December.
    13. Ziramba, Emmanuel, 2008. "The demand for residential electricity in South Africa," Energy Policy, Elsevier, vol. 36(9), pages 3460-3466, September.
    14. Peñasco, Cristina & del Río, Pablo & Romero-Jordán, Desiderio, 2017. "Gas and electricity demand in Spanish manufacturing industries: An analysis using homogeneous and heterogeneous estimators," Utilities Policy, Elsevier, vol. 45(C), pages 45-60.
    15. Carlos Enrique Carrasco-Gutierrez & Philipp Ehrl, 2023. "Regional Estimates of Residential Electricity Demand in Brazil," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 465-476, January.
    16. Hosoe, Nobuhiro & Akiyama, Shu-ichi, 2009. "Regional electric power demand elasticities of Japan's industrial and commercial sectors," Energy Policy, Elsevier, vol. 37(11), pages 4313-4319, November.
    17. Balarama, Hemawathy & Islam, Asad & Kim, Jun Sung & Wang, Liang Choon, 2020. "Price elasticities of residential electricity demand: Estimates from household panel data in Bangladesh," Energy Economics, Elsevier, vol. 92(C).
    18. Inglesi, Roula, 2010. "Aggregate electricity demand in South Africa: Conditional forecasts to 2030," Applied Energy, Elsevier, vol. 87(1), pages 197-204, January.
    19. Debnath, Kumar Biswajit & Mourshed, Monjur, 2018. "Forecasting methods in energy planning models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 88(C), pages 297-325.
    20. Zhang, Yi & Ji, Qiang & Fan, Ying, 2018. "The price and income elasticity of China's natural gas demand: A multi-sectoral perspective," Energy Policy, Elsevier, vol. 113(C), pages 332-341.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:36:y:2011:i:2:p:1115-1123. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.