Empirical essays in the residential demand for electricity

Abstract

This dissertation consists of a series of studies, both experimental and non-experimental, using data on electricity demand with the individual households as the unit of observation. These studies address several questions of interest in economics such as short run versus long run price elasticities, the external validity of experimental studies of electricity demand, electricity use in a master metered apartment complex, and econometric estimation of household electricity demand. Part I of the dissertation is an empirical analysis involving the monthly electricity use of 300 households from College Station, Texas, over the period 1972-1975. Of the 300 households, 128 were volunteers in an energy experiment conducted in College Station during the summer of 1975. The analysis of Part I deals with a comparison of the volunteers to the subjects chosen at random. Primary interest is placed on how the volunteers responded to electricity price changes and non-price factors compared with the response of the subjects chosen at random, and also how the two groups compared in terms of other characteristics such as energy use levels. More generally the question of volunteer bias is investigated in this section. Part II of the dissertation is an analysis of the above data set concerned with the modeling of monthly energy demand of each household in terms of response to fuel adjustment changes and non-price factors such as the oil embargo. Part III of the dissertation is an analysis of two experiments conducted in a master metered apartment complex during the periods 9/6/76 - 10/3/76 and 1/31/77 - 3/10/77. The experiments were designed to examine the responsiveness of tenants to a payment scheme which placed a cost on each individual tenant for his electricity use. Tenants, whose apartments were checked at random during experimental weeks, received cash payments only if they were meeting certain energy use criteria which had been specified at the beginning of the experiments.