The Elastisities Of Electricity Demand In Urban Households

Following the rapid economic growth in Zhejiang province,the demand for electricity in residential sector is increasing rapidly,and the residential market for electricity is becoming the second one in Zhejing,following the industry sector.Because the first resource is finite in Zhejiang province,the increasement of energy makes supply-demand of energy in Zhejiang province a serious problem.To making the use of energy sustainbly,we should conserve energy and have some demand management policies.The objective of this study is to find the behaviours of residential electricity demand,and knows the trendency of the electricity demand,so we can help to make some appropriate electricity policies,realize a sustainble electricity use.By imploying annual time series data over the period form 1985 to 2008,the paper estimated short-,middle-and long-term elasticities of electricity demand in urban Zhejiang provincial households.Three structure models of Translog utility function,box-cox model and partial adjustment model were applied to estimate the elasticity of urban residential demand for electricity,by using FIML,ML,OLS to obtain parametre,then further analyze the responsiveness of electricity consumption to electricity price,disposable income, price of alternate fuels and temperture.we found two significant conclusions:Firstly,the empirical results of three econometric models which the paper employed are fairly consistent each other in totally,and each model has different performance.The paper used three structure models which were used constantly, and obtained the consistent elasticities for electricity demand.In addition, the translog utility function only analyzed the middle-and long-term elasticities of residential demand for electricity.Box-cox model and partial adjustment model computed the short-,middle-and long-term elasticities,but because of the assumption of the short term elasticities to be constant in partial adjustment model,the Box-cox model is more flexible than partial adjustment model,and the results of the former is more accurate,and also more predictable.Secondly,the paper computed the periodic elasticity of urban residential demand for electricity,and had the explainable and comparable results.The results comfort to the economic theory,in spite of the short-term elasticities or middle-term,long one. And electricity is found to be price and income inelastic in the short term,however price inelastic and income elastic in the long term.Especially,we found a statistically significant adjustment coefficient of 0.60 and a mean lag of 1.5,indicating that the urban households adjusts the stock of energy -sing appliance fastly when electricity price and income change.In addition,among the electricity and alternate fuels such as LPG,we found a statistically insignificant alternate price elasticity.When we campared these results in the whole world,we can see that in the developed countries such as EU,U.S.,the long-term price elasticity is bigger than the long-term income one;and in the developing areas,for exmple South Korean,the long-term price elasticity is smaller than the long-term income one. The elasticites of electricity demand in urban Zhejiang provincial households is analogous to the latter.