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U.S. Department of Energy
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Price elasticity variation: An engineering-economic approach: Final report

Technical Report ·
OSTI ID:6723661
This report discusses variable elasticities and an engineering-economic approach to estimating elasticity in the residential sector. The report is in two parts. The first part includes a discussion of the factors that affect price elasticity estimates, a survey of estimates of price elasticities in the residential sector from 1978 to 1982, and a critical evaluation of interesting and controversial studies during this period. The second part of the report is an application of engineering-economic methods to estimate long and short run price elasticities in the residential sector. The elasticities were estimated using data for Gulf States Utilities Company, based in Beaumont, Texas. The price forecast used in our analysis, to estimate future residential electricity demand, is one of the many forecasts that the utility company uses for analysis purposes, and should not be construed as an official company forecast of electricity prices. Our short run model examines how income, prices, and other independent variables influence capacity utilization of appliances rather than electricity demand. Long run elasticity is estimated using an engineering economic approach, by combining our estimate of short run elasticity with projections of stock changes.
Research Organization:
Lawrence Berkeley Lab., CA (USA); Electric Power Research Inst., Palo Alto, CA (USA)
DOE Contract Number:
AC03-76SF00098
OSTI ID:
6723661
Report Number(s):
EPRI-EM-5038; ON: DE87006952
Country of Publication:
United States
Language:
English