| Scope of study. This study recognized that electricity is not a consumer good because it does not provide direct utility; therefore, electricity is treated as an input in the production function of residential customers who produce an "energy good.".;Findings and conclusions. The endogenous variable of the model, namely, marginal price, intramarginal premium, income, cooling degree days, and price of natural gas, were significant. The price elasticity while less than one, could not be proven to be statistically different than one. The absolute value of the coefficient of intramarginal premium and coefficient of income were not equal. Natural gas is a very good substitute for electricity. Summer temperatures affect residential consumption but not winter temperatures.;The actual utility company rates are used to get the ex ante "marginal price" and "intramarginal premiums" to overcome the error bias. |
