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

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Listed:
  • Cao, K.H.
  • Qi, H.S.
  • Li, R.
  • Woo, C.K.
  • Tishler, A.
  • Zarnikau, J.

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.

Suggested Citation

  • Cao, K.H. & Qi, H.S. & Li, R. & Woo, C.K. & Tishler, A. & Zarnikau, J., 2023. "An experiment in own-price elasticity estimation for non-residential electricity demand in the U.S," Utilities Policy, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:juipol:v:81:y:2023:i:c:s0957178723000012
    DOI: 10.1016/j.jup.2023.101489
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