Price and income elasticities of electricity demand: Evidence from Jamaica

Alrick Campbell

doi:10.1016/j.eneco.2017.10.040

Price and income elasticities of electricity demand: Evidence from Jamaica

Alrick Campbell

Indonesia Project

Research output: Contribution to journal › Article › peer-review

50 Citations (Scopus)

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.

Original language	English
Pages (from-to)	19-32
Number of pages	14
Journal	Energy Economics
Volume	69
DOIs	https://doi.org/10.1016/j.eneco.2017.10.040
Publication status	Published - Jan 2018

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10.1016/j.eneco.2017.10.040

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title = "Price and income elasticities of electricity demand: Evidence from Jamaica",

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.",

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AB - 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.

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KW - Elasticity

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JO - Energy Economics

JF - Energy Economics

ER -

Price and income elasticities of electricity demand: Evidence from Jamaica

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