Analyzing Small Industrial and Commercial User Demand for Electricity

Allen, Keighton R.; Fullerton, Thomas M.

doi:10.4236/tel.2018.814193

Cited by 2 publications

(4 citation statements)

References 18 publications

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“…That section also provides an overview of the estimation procedure employed by this study. The methodologies selected have been designed for, and applied to, the analysis of commercial and industrial electricity consumption in several recent studies (Amusa et al, 2009;Allen and Fullerton, 2018). As argued by Shumway (1995), duality theory provides a useful point of departure for derived input demand estimation.…”

Section: Literature Reviewmentioning

confidence: 99%

“…That underlying profit function is assumed to be the dual of a production function. Formal details regarding the specification of the underlying profit function are reported in Allen and Fullerton (2018). This approach has been successfully utilized to empirically analyze CIS usage for the nearby metropolitan economy of El Paso, located 40 miles to the south in Texas (Allen and Fullerton, 2019).…”

Section: Theoretical Modelmentioning

confidence: 99%

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Small Firm Electricity Demand in Las Cruces, New Mexico, USA

Fullerton, Jr.,

Pastor,

Pokojovy

et al. 2023

ECONOMIA

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Research examining small commercial and industrial electricity usage patterns have historically received less attention than residential electricity consumption patterns. This study examines electricity as an input to small firm commercial and industrial (CIS) production in Las Cruces, the second largest metropolitan economy in the state of New Mexico, using annual frequency data from 1978 to 2018. Those data include labor, per capita personal income, price measures for electricity and natural gas, and weather variables. The long-run and short-run elasticities of the data are then estimated using an autoregressive distributed lag model (ARDL). In the long-run, the CIS derived-demand curve is found to be upward sloping, and Las Cruces CIS customers use natural gas as a complementary input. Real per capita income is also found to have a positive impact in the long-run, while weather impacts are found to be ambiguous. In the short-run, the Las Cruces CIS derived-demand curve is downward sloping, CIS customers use natural gas as a substitute factor, and weather extremes are found to be positively correlated with small firm electricity usage.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Theoretical Modelmentioning

confidence: 99%

Small Firm Electricity Demand in Las Cruces, New Mexico, USA

Fullerton, Jr.,

Pastor,

Pokojovy

et al. 2023

ECONOMIA

View full text Add to dashboard Cite

show abstract

“…Results indicate that, over the long-run, El Paso households consume electricity as an inferior good and in a manner that is price elastic. The formal model specification for CIS usage is based upon duality theory using the analytical framework of Allen and Fullerton (2018). In that construct, CIS usage is characterized by an input-demand function that is derived from a normalized quadratic profit function.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Duality theory and a normalized quadratic functional form are used to describe CIS demand for electricity as derived demand (Allen and Fullerton, 2018). The derived input-demand function for electricity shown in equation 1 is used to empirically specify and estimate long-run and short-run models of CIS electricity consumption using an ECM within an ARDL framework.…”

Section: Empirical Modelmentioning

confidence: 99%

Metropolitan Evidence Regarding Small Commercial and Industrial Electricity Consumption

Allen¹,

Fullerton

2019

IJEEP

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Small commercial and industrial (CIS) electricity demand is an important category of electric energy consumption. Historically, it has received substantially less research attention than residential usage, potentially due to data constraints. This study seeks to partially fill that gap in the energy economics literature by employing a fairly unique data set for the El Paso, Texas, USA metropolitan economy that includes private capital stock estimates from 1978 through 2017. The empirical model is specified using a recently developed analytical framework based on duality theory and a derived input demand function. Parameter estimation is completed using an Autoregressive-distributed lag model and an error correction model. In the long-run, CIS customers in El Paso respond only to own-price and the quantity of capital stock per capita. In the short-run, CIS customers adjust their electricity usage in response to changes in all variables except for the price of electricity. The most unexpected result from this analysis is a short-run income elasticity of −0.32, indicating that CIS electricity usage decreases with economic expansion in El Paso, Texas.

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Analyzing Small Industrial and Commercial User Demand for Electricity

Cited by 2 publications

References 18 publications

Small Firm Electricity Demand in Las Cruces, New Mexico, USA

Small Firm Electricity Demand in Las Cruces, New Mexico, USA

Metropolitan Evidence Regarding Small Commercial and Industrial Electricity Consumption

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