Using an unique dataset containing millions of bi-annual meter readings of electricity consumption within France from 2007 and 2015, we estimate the price elasticity of electricity expenditure of private households.
We propose three different specifications for the study of price elasticities. A more canonical specification in which we regress electricity consumption on a price per kilowatt/hour; a second specication that follows Filippini (1995) and presents an Almost Identical Demand System (AIDS) model; nally an extension of the latter that allows elasticities to be season-dependent and differ between summer and winter. In all models we control for years and months fixed effects as well as weather and another set of economic variables at the department level. In our first estimation we find an elasticity of electricity consumption on price equal to -0.8, a result remarkably in line with the previous literature. In our AIDS models we also obtain results very close to the ones obtained by Filippini et Al. In particular price elasticities of -1.46 and -1.86 for peak and o-peak prices (Filippini reports -1.41 and -2.57). In our seasonal model we report elasticities for winter of -1.45 and -1.85, and for summer slightly higher in absolute value, equal to -1.61 and -2.08.