The evolution of price elasticity of electricity demand in South Africa: A Kalman filter application

The evolution of price elasticity of electricity demand in South Africa: A Kalman filter application

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Article ID: iaor20115423
Volume: 39
Issue: 6
Start Page Number: 3690
End Page Number: 3696
Publication Date: Jun 2011
Journal: Energy Policy
Authors:
Keywords: economics, demand
Abstract:

  • The price elasticity of South Africa's electricity demand (1980–2005) is examined.
  • The Kalman filter methodology is used to show elasticity changes over time.
  • Decreasing effect of electricity prices to consumption over the years is found.
  • The higher the prices of electricity were, the higher the sensitivity of consumption.
  • If electricity prices increase, consumers will choose to consume more efficiently.
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