Journal of Energy Engineering (에너지공학)

The Korean Society for Energy (한국에너지학회)
권호 표지
DOI QR코드

DOI QR Code

The Economic Value of Residential Electricity Consumption in Seoul

  • Yoo, Seung-Hoon (Department of Energy Policy, School of Energy & Environment, Seoul National University of Science & Technology) ;
  • Lee, Seung-Ryul (Department of Energy Policy, School of Energy & Environment, Seoul National University of Science & Technology)
  • Received : 2012.01.10
  • Accepted : 2012.02.21
  • Published : 2012.03.31
Download PDF
⟨ Previous Next ⟩

Abstract

Electricity is the basic building block of economic development, and constitutes one of the vital infra-structural inputs in socio-economic development. The demand for electricity has been increasing due to extensive urbanization, industrialization, and a rise in the standard of living, as is the case with residential electricity consumption. This paper attempts to estimate the consumer surplus and the economic value of the residential consumption of electricity in Seoul to assist in decision-making in electricity management. The estimated consumer surplus represents the value of the area under the demand curve, above the actual price that is paid for residential electricity consumption. The estimated annual consumer surplus and economic value for the year 2005 amount to 2,144.7 and 3,727.4 billion won, respectively. The estimates per kWh were 184.9 and 316.0 won, respectively, which imply that the consumer surplus and the economic value of residential electricity consumption significantly outweigh the average price of electricity in 2005 of 91.1 won per kWh.

Keywords

References

  1. Alexander, D. L., Kern, W., Neill, J. Valuing the consumption benefits from professional sports franchises. Journal of Urban Economics, 2000, 48, 321-337. https://doi.org/10.1006/juec.1999.2169
  2. Berkhout, P., Ferrer-i-Carbonellb, A. and Muskens, J. The ex post impact of an energy tax on household energy demand. Energy Economics, 26, 2004, 297-317.
  3. Berndt, E. R. Practice of econometrics: classic and contemporary. Addison-Wesley, 1991.
  4. BP, Statistical Review of World Energy 2011. Available at http://www.bp.com, 2011.
  5. Ferguson, R., Wilkinson, W., Hill, R. Electricity use and economic development. Energy Policy, 2000, 28, 923-934. https://doi.org/10.1016/S0301-4215(00)00081-1
  6. Filippini, M., Pachauria, S. Elasticities of electricity demand in urban Indian households. Energy Policy, 2004, 32, 429-436. https://doi.org/10.1016/S0301-4215(02)00314-2
  7. Holtedahl, P., Joutz, F. Residential electricity demand in Taiwan. Energy Economics, 2004, 26, 204-224.
  8. Hondroyiannis, G. Estimating residential demand for electricity in Greece. Energy Economics, 2004, 26, 319-334. https://doi.org/10.1016/j.eneco.2004.04.001
  9. Krinsky, I., Robb, A. On approximating the statistical properties of elasticities. Review of Economics and Statistics, 1986, 68, 715-719. https://doi.org/10.2307/1924536
  10. Rosenberg, N, The role of electricity in industrial development. The Energy Journal, 1998, 19, 7-24.
  11. Willig, R.D. Consumer's surplus without apology. American Economic Review, 1976, 66, 589-597.
  12. Yoo, S.-H. Electricity consumption and economic growth: evidence from Korea. Energy Policy, 2005, 33, 1627-1632. https://doi.org/10.1016/j.enpol.2004.02.002
  13. Yoo, S.-H., Lee, J.-S, Kwak, S.-J. Estimation of residential electricity demand function in Seoul by correction for sample selection bias. Energy Policy, 2007, 35, 5702-5707. https://doi.org/10.1016/j.enpol.2007.06.009

Cited by

  1. Economic Feasibility Analysis of Building Seonam Biogas Combined Heat and Power Plant vol.25, pp.4, 2016, https://doi.org/10.5855/ENERGY.2016.25.4.141
  2. Estimation of residential electricity demand function using cross-section data vol.22, pp.1, 2013, https://doi.org/10.5855/ENERGY.2013.22.1.001