Dynamic demand for residential electricity in Taiwan under seasonality and increasing-block pricing

Ming-Feng Hung and Tai-Hsin Huang

Energy Economics, 2015, vol. 48, issue C, 168-177

Abstract: This paper studies the dynamic demand for residential electricity in Taiwan employing a monthly panel data set, composed of 19 counties and spanning the period from 2007:01 to 2013:12. The partial adjustment model used addresses the endogeneity of the electricity price that results from the increasing-block pricing. The estimated results show that there is a significant seasonal difference in the demand for electricity between the summer and non-summer periods. Both the adjustment speed and own price elasticity during the summer months are found to be lower than those in the non-summer months due to the hot weather in summer. It is easier for consumers to adjust their electricity consumption in response to the changes in electricity pricing during the non-summer time. The estimated inelastic short-run and long-run income effects show that electricity is a necessity for consumers. Moreover, the controversial electricity-conservation policies are found to be ineffective measures for reducing electricity consumption in Taiwan.

Keywords: Residential electricity demand; Increasing-block pricing; Seasonality; Partial adjustment model; Price elasticity; Income effects (search for similar items in EconPapers)
JEL-codes: D Q Q4 Q41 Q48 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (29)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:48:y:2015:i:c:p:168-177

DOI: 10.1016/j.eneco.2015.01.010

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