On the estimation of the price elasticity of electricity demand in the manufacturing industry of Colombia

Jorge Barrientos (), Esteban Velilla (), David Tobón-Orozco (), Fernando Villada () and Jesús M. López-Lezama ()
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Jorge Barrientos: Universidad de Antioquia
Esteban Velilla: Universidad de Antioquia
David Tobón-Orozco: Universidad de Antioquia
Fernando Villada: Universidad de Antioquia
Jesús M. López-Lezama: Universidad de Antioquia
Authors registered in the RePEc Author Service: David Tobón Orozco

Lecturas de Economía, 2018, issue 88, 155-182

Abstract: This paper presents an estimation of the reaction of electricity demand to changes in price levels of forward contracts in the manufacturing industry of Colombia. To that end, a structural vector autoregressive (SVAR) model was developed, considering several economic activities at different voltage levels. The industrial sectors under study showed an electricity demand not significantly sensitive to price variations. However, the food and drink sectors, plastic and rubber manufacturing, as well as retail trade turned out to be more sensitive to price shocks than the chemical industry or textile manufacturing. Such inelasticity could be softened if information concerning prices and quantity demanded were of common knowledge, or if the forward curve were observable

Keywords: electricity markets; forward contracts; price elasticity of demand; SVAR models (search for similar items in EconPapers)
JEL-codes: D43 D61 L13 L43 Q41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (7)

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Journal Article: On the estimation of the price elasticity of electricity demand in the manufacturing industry of Colombia (2018)
Working Paper: On the estimation of the price elasticity of electricity demand in the manufacturing industry of Colombia (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:lde:journl:y:2018:i:88:p:155-182

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DOI: 10.17533/udea.le.n88a05

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