The demand for residential, industrial and total electricity, 1973-1998

This paper estimates residential, industrial, and total electricity demand by a partial-adjustment approach and by a simultaneous equation approach. Simultaneous equation models are more appropriate since they provide negative price elasticity estimates for the residential, industrial and total electricity samples. Flow-adjustment models yield positive price elasticity estimates in some cases, suggesting they fail to identify proper supply considerations that may be influencing prices. The simultaneous equation approach suggests that residential customers are more price sensitive than industrial customers. Weather seems to have the greatest impact on the residential sector, and cold weather appears to affect demand more than hot weather. (C) 2003 Elsevier Science B.V. All rights reserved.