Swiss residential demand for electricity

Abstract

A residential demand for electricity is estimated using aggregate data at a city level for 40 Swiss cities over the period 1987 to 1990. For this purpose, a log linear stochastic equation for electricity consumption was estimated. The empirical analysis has highlighted some of the characteristics of the Swiss residential electricity market. The price elasticity was estimated to be -0.30, which shows a moderate responsiveness of electricity consumption to changes in prices. This result indicates a price-inelastic demand for electricity with a lower price elasticity than those reported in previous studies. From an energy policy point of view this result implies that there is little room for discouraging residential electricity consumption using price increases.