Publications
Publications
- January 2020
- American Economic Journal: Applied Economics
The Long-Run Dynamics of Electricity Demand: Evidence from Municipal Aggregation
By: Tatyana Deryugina, Alexander MacKay and Julian Reif
Abstract
We study the dynamics of residential electricity demand by exploiting a natural experiment that produced large and long-lasting price changes in over 250 Illinois communities. Using a flexible difference-in-differences matching approach, we estimate that the price elasticity of demand grows from -0.09 in the first six months to -0.27 two years later. We find similar results with a dynamic model in which usage is a function of past and future prices. Our findings highlight the importance of accounting for consumption dynamics when evaluating energy policy.
Keywords
Electricity Demand; Consumption Dynamics; Energy; Policy; Demand and Consumers; Price; Mathematical Methods
Citation
Deryugina, Tatyana, Alexander MacKay, and Julian Reif. "The Long-Run Dynamics of Electricity Demand: Evidence from Municipal Aggregation." American Economic Journal: Applied Economics 12, no. 1 (January 2020): 86–114.
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