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Recent evidence on determinants of per residential customer electricity consumption in the U.S.: 2001-2005

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Abstract

This empirical study seeks to provide empirical evidence identifying key factors that have influenced per residential customer electricity consumption in the U.S. during recent years. This empirical analysis takes the form of P2SLS (panel two-stage least squares) estimations. State-level data are adopted for the five-year period from 2001 through 2005. The P2SLS findings indicate that the annual consumption of electricity per residential customer is an increasing function of the annual number of cooling degree days, real per capita personal disposable income, and the real unit price of natural gas. Annual per residential customer electricity consumption is also found to be a decreasing function of the real unit price of electricity and the extent of usage of natural gas for residential heating, as well as the degree to which each state has pursued energy efficiency policies. Finally, said consumption is also found to be positively a function of a control variable measuring peak summer electricity generating capacity.

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Notes

  1. The finding in this study is that the own price elasticity of the per residential customer demand for electricity lies in the range of 2.3 to 2.5 in absolute value terms.

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  1. Jacksonville University, Jacksonville, FL, USA

    Richard J. Cebula

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  1. Richard J. Cebula
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Correspondence to Richard J. Cebula.

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Cebula, R.J. Recent evidence on determinants of per residential customer electricity consumption in the U.S.: 2001-2005. J Econ Finan 36, 925–936 (2012). https://doi.org/10.1007/s12197-010-9159-2

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  • DOI: https://doi.org/10.1007/s12197-010-9159-2

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