Scandinavian Working Papers in Economics
Umeå Economic Studies,
Umeå University, Department of Economics
No 910: Determinants of Residential end-use electricity demand: Evidence from Sweden
Mattias Vesterberg (), Chandra Kiran B. Krishnamurthy () and Oben Bayrak ()
Additional contact information
Mattias Vesterberg: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Chandra Kiran B. Krishnamurthy: Beijer Institute of Ecological Economics, The Royal Academy of Sciences, Postal: Stockholm, Sweden
Oben Bayrak: Department of Forest Economics, SLU, Postal: Umeå, Sweden
Abstract: Using a household appliance metering data set from the Swedish Energy Agency, this paper focuses on understanding the determinants of end-use electricity demand for Sweden. The focal point of the analysis is the estimation of end-use-specific income elasticity of electricity demand, for the first time for Sweden. A seemingly unrelated regression framework is used for understanding the determinants of end-use demand, with the end-uses being heating, kitchen, lighting, and residual. The main results of the analysis are: high aggregate elasticity (above 0.6), and very high income elasticity of electric heating (above 0.8). Other size-related variables (size of home, number of people) do not appear to have significant explanatory power. Overall, our analysis indicates that income is a key factor determining the demand for electricity, and to a much larger extent than usually considered.
Keywords: Direct Metering; Residential Electricity Demand; income elasticity
32 pages, June 16, 2015
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