Elasticity estimation and forecasting: An analysis of residential electricity demand in Brazil

Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia

“…Conversely, there are significant short-run elasticities of REC due to the changes in income (inelastic) and price (elastic) in the short run. The result of income elasticity is consistent with Bohlmann and Inglesi-Lotz (2021), Cabral et al (2020), and Bildirici and Kayikci ( 2016) but inconsistent with Ivy-Yap and Bekhet (2015). However, the result of price elasticity is consistent with Dergiades and Tsoulfidis (2008) for the case of the USA and inconsistent with Narayan and Smyth (2005), Dergiades and Tsoulfidis (2009), and Bildirici and Kayikci (2016).…”

“…The price elasticity provides an understanding of how price changes affect electricity demand, allows estimating future generation and capacity requirements (Csereklyei, 2020;Labandeira et al, 2017;Wang and Mogi, 2017), as well as plan and organise the adequate supply of electricity to the grids in their respective markets (Cabral et al, 2020). The price elasticity of demand is also a key factor in quantifying changes in welfare effects due to environmental or energy policy changes (Burke and Abayasekara, 2018;Miller and Alberini, 2016).…”

“…The elastic price elasticity indicates that people are sensitive towards the changes in the price of energy or electricity because energy or electricity for them is a normal good, people have longer or enough time to alter their consumption and respond to the price changes, or there are other alternatives to substitute the role of energy or electricity. However, inelastic price elasticity specifies that people are not sensitive towards the price change, or they have limited time to alter their consumption or the role of energy or electricity as a necessity good or lack of substitute goods and alternatives to replace the function of energy or electricity (Cabral et al, 2020). For inelastic demand, reducing consumption would not be effective by increasing the tariff, ceteris paribus vice versa.…”

“…Therefore, developing a well-specified electricity demand model is a must. Through it, policymakers can model the electricity demand of their markets and guarantee productive, allocative and environmental efficiencies (Cabral et al, 2020).…”

Estimating Elasticities for the Residential Demand of Electricity in Brazil Using Cointegration Models

“…The authors were able to investigate heterogeneous effects across families using quantile regression (QR) analysis. The only study that considered spatial spillovers of electricity demand in the Brazilian setting wasCabral et al (2020). These authors estimated income and price elasticities using the Dynamic Spatial Durbin model and concluded that taking into account the spatial dependence among Brazilian regions improve the goodness of fit.…”