We use monthly data for the lower 48 states in the US and 30-year period of 1991–2020 to estimate commercial electricity demand’s price responsiveness. Our key findings are: (1) the US commercial electricity demand’s statistically significant (p-value ≤ 0.05) own-price elasticity estimates are between − 0.03 and − 0.08; and (2) the size of these estimates has been slowly declining over time. Hence, price-induced conservation is unlikely effective, at least in the immediate future, to materially reduce the US commercial electricity consumption, thus justifying continuation of energy efficiency standards and demand side management programs. Copyright © 2021 Elsevier Inc. All rights reserved.
CitationLi, R., & Woo, C.-K. (2022). How price responsive is commercial electricity demand in the US? The Electricity Journal, 35(1). Retrieved from https://doi.org/10.1016/j.tej.2021.107066
- Commercial electricity demand
- Price elasticity
- Cross-section dependence
- Panel data analysis
- United States