Analysis And Study On The Electricity Price Elasticity Of Demand And Price Formation Mechanism

This paper studied the price elasticity of each kind of user systematically based on double-logarithmic regression estimation model, Granger Causality Test Model (GCTM) and Panel Date Model (PDM), selecting electricity price, economic development level, and alternative energy prices etc. as factors. According to comparative analysis of the price elasticity in our country and other countries for all kinds of users, we get a conclusion that residential customers'electricity demand in China lacks of price elasticity, while the change of industrial and commercial price mechanism can have a significant impact on their electricity demand. This research developed different price mechanisms for different users based on their sensitivities to price changing. Researching on the price formation mechanism based on price elasticity can promote users to adjust the time and load of power use initiatively to achieve peak load shifting, while promoting user's fair burden, and actively guiding customers to conserve electricity, encouraging energy saving and environment protecting, and providing a basis for scientific and rational sales price policy.