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http://dx.doi.org/10.5855/ENERGY.2013.22.1.001

Estimation of residential electricity demand function using cross-section data  

Lim, Seul-Ye (Depart of Energy Policy Graduate School of Energy & Environment, Seoul National University of Science & Technology)
Lim, Kyoung-Min (Depart of Energy Policy Graduate School of Energy & Environment, Seoul National University of Science & Technology)
Yoo, Seung-Hoon (Depart of Energy Policy Graduate School of Energy & Environment, Seoul National University of Science & Technology)
Publication Information
Journal of Energy Engineering / v.22, no.1, 2013 , pp. 1-7 More about this Journal
Abstract
This paper attempts to estimate the residential electricity demand function, using survey data of 521 households in Korea. As the residential electricity demand function provides us information on the pattern of consumer's electricity consumption, it can be usefully utilized in predicting the impact of policy variables such as electricity price and forecasting electricity demands. We apply least absolute deviation(LAD) estimation as a robust approach to estimating parameters. The results showed that price and income elasticities are -0.68 and 0.14 respectively, and statistically significant at the 10% levels. The price and income elasticities portray that residential electricity is price- and income-inelastic. This implies that the residential electricity is indispensable goods to human-being's life, thus the residential electricity demand would not be promptly adjusted to responding to price and/or income change.
Keywords
demand function; residential electricity; price elasticity; income elasticity;
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Times Cited By KSCI : 1  (Citation Analysis)
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