IDEAS home Printed from https://ideas.repec.org/a/ijr/journl/v3y2015i2p73-85.html
   My bibliography  Save this article

The Residential Demand for Electricity in South Korea

Author

Listed:
  • Tingwen Liu

    (China University of Political Science and Law, 27 Fuxue Lu, Changping District, Beijing, China)

Abstract

We study the residential sector electricity demand in South Korea based on aggregate monthly time series data from 2003 to 2013. We show that, on aggregate, households respond to the previous month average electricity price by encompassing tests, which can be explained by the households' cognitive cost of obtaining the price information for current billing cycle as Ito (2014) implied. Methodology: Based on a linear double-logarithmic specification, the estimated price and income elasticities are around -0.2720 and unity, respectively. Findings: Temperature and different types of days also affect the electricity demand. After controlling the Underlying Energy Demand Trend (UEDT) by a Structure Time Series Model (STSM), the substitution elasticities become insignificant, and the UEDT shows a steady deceasing usage trend.Recommendations: The study has important policy implications for policy making authorities.

Suggested Citation

  • Tingwen Liu, 2015. "The Residential Demand for Electricity in South Korea," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(2), pages 73-85, Fabruary.
    • Handle: RePEc:ijr:journl:v:3:y:2015:i:2:p:73-85
    as

    Download full text from publisher

    File URL: http://tesdo.org/shared/upload/pdf/papers/IJEER,%203_2_,%2073-85%20.pdf
    Download Restriction: no
    File URL: http://tesdo.org/journal_detail.php?paper_id=134&expand_year=2015
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ahmad Faruqui & Sanem Sergici, 2011. "Dynamic pricing of electricity in the mid-Atlantic region: econometric results from the Baltimore gas and electric company experiment," Journal of Regulatory Economics, Springer, vol. 40(1), pages 82-109, August.
    2. Lijesen, Mark G., 2007. "The real-time price elasticity of electricity," Energy Economics, Elsevier, vol. 29(2), pages 249-258, March.
    3. 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.
    4. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    5. Severin Borenstein & James B. Bushnell & Frank A. Wolak, 2002. "Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market," American Economic Review, American Economic Association, vol. 92(5), pages 1376-1405, December.
    6. Peter C. Reiss & Matthew W. White, 2005. "Household Electricity Demand, Revisited," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(3), pages 853-883.
    7. Lester D. Taylor, 1975. "The Demand for Electricity: A Survey," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 74-110, Spring.
    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. Woo, C.K. & Liu, Y. & Zarnikau, J. & Shiu, A. & Luo, X. & Kahrl, F., 2018. "Price elasticities of retail energy demands in the United States: New evidence from a panel of monthly data for 2001–2016," Applied Energy, Elsevier, vol. 222(C), pages 460-474.
    2. Jia, Jun-Jun & Guo, Jin & Wei, Chu, 2021. "Elasticities of residential electricity demand in China under increasing-block pricing constraint: New estimation using household survey data," Energy Policy, Elsevier, vol. 156(C).
    3. Hung, Ming-Feng & Huang, Tai-Hsin, 2015. "Dynamic demand for residential electricity in Taiwan under seasonality and increasing-block pricing," Energy Economics, Elsevier, vol. 48(C), pages 168-177.
    4. Ghaith, Ahmad F. & Epplin, Francis M., 2017. "Consequences of a carbon tax on household electricity use and cost, carbon emissions, and economics of household solar and wind," Energy Economics, Elsevier, vol. 67(C), pages 159-168.
    5. Woo, C.K. & Shiu, A. & Liu, Y. & Luo, X. & Zarnikau, J., 2018. "Consumption effects of an electricity decarbonization policy: Hong Kong," Energy, Elsevier, vol. 144(C), pages 887-902.
    6. Dergiades, Theologos & Tsoulfidis, Lefteris, 2008. "Estimating residential demand for electricity in the United States, 1965-2006," Energy Economics, Elsevier, vol. 30(5), pages 2722-2730, September.
    7. Pedro Linares & Xavier Labandeira, 2010. "Energy Efficiency: Economics And Policy," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 573-592, July.
    8. Gunnar Eskeland & Torben Mideksa, 2010. "Electricity demand in a changing climate," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 15(8), pages 877-897, December.
    9. Fell, Harrison & Li, Shanjun & Paul, Anthony, 2014. "A new look at residential electricity demand using household expenditure data," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 37-47.
    10. Kiran B Krishnamurthy, Chandra & Kriström, Bengt, 2013. "A cross-country analysis of residential electricity demand in 11 OECD-countries," CERE Working Papers 2013:5, CERE - the Center for Environmental and Resource Economics, revised 30 Jun 2014.
    11. Cho, Seong-Hoon & Kim, Taeyoung & Kim, Hyun Jae & Park, Kihyun & Roberts, Roland K., 2015. "Regionally-varying and regionally-uniform electricity pricing policies compared across four usage categories," Energy Economics, Elsevier, vol. 49(C), pages 182-191.
    12. Alberini, Anna & Gans, Will & Velez-Lopez, Daniel, 2011. "Residential consumption of gas and electricity in the U.S.: The role of prices and income," Energy Economics, Elsevier, vol. 33(5), pages 870-881, September.
    13. Jeyhun I. Mikayilov & Fakhri J. Hasanov & Carlo A. Bollino & Ceyhun Mahmudlu, 2017. "Modeling of Electricity Demand for Azerbaijan: Time-Varying Coefficient Cointegration Approach," Energies, MDPI, vol. 10(11), pages 1-12, November.
    14. Arbues, Fernando & Villanu´a, Inmaculada & Barberán Ortí, Ramón, 2010. "Household size and residential water demand: an empirical approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 1-20.
    15. Kussel, Gerhard & Frondel, Manuel, 2016. "Switching Response to Power Prices: Evidence from German Households," VfS Annual Conference 2016 (Augsburg): Demographic Change 145728, Verein für Socialpolitik / German Economic Association.
    16. David P. Brown & Derek E. H. Olmstead, 2017. "Measuring market power and the efficiency of Alberta's restructured electricity market: An energy-only market design," Canadian Journal of Economics, Canadian Economics Association, vol. 50(3), pages 838-870, August.
    17. Knaut, Andreas & Paulus, Simon, 2016. "When are consumers responding to electricity prices? An hourly pattern of demand elasticity," EWI Working Papers 2016-7, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI), revised 16 Mar 2017.
    18. Cao, K.H. & Qi, H.S. & Tsai, C.H. & Woo, C.K. & Zarnikau, J., 2021. "Energy trading efficiency in the US Midcontinent electricity markets," Applied Energy, Elsevier, vol. 302(C).
    19. repec:hal:wpspec:info:hdl:2441/5k7940uimfdf9c898a1ol5436 is not listed on IDEAS
    20. Genc, Talat S., 2016. "Measuring demand responses to wholesale electricity prices using market power indices," Energy Economics, Elsevier, vol. 56(C), pages 247-260.

    More about this item

    Keywords

    Residential electricity market; Demand; Price elasticity;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    Statistics

    Access and download statistics

    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:ijr:journl:v:3:y:2015:i:2:p:73-85. 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: Dr. Muhammad Shahbaz (PhD Applied Economics) (email available below). General contact details of provider: https://edirc.repec.org/data/tesdopk.html .

    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.