Estimation of The Price and Income Elasticities of Residential Electricity Demand in Indonesia Using Household-Level Data
DOI:
https://doi.org/10.14203/JEP.30.2.2022.131-148Keywords:
household data, electricity demand, price elasticity, income elasticityAbstract
This paper presents household-level econometric estimates of income and price elasticities of residential electricity demand in Indonesia. Using annual household survey panel data of SUSENAS from 2011 to 2013, the estimation controls for household characteristics that significantly affect electricity consumption, such as demographic aspects, house size, and ownership of home appliances. The empirical results showed that in Indonesia, the residential electricity is price- and income-inelastic, with price and income elasticities of -0.88 and 0.3, respectively. Urban residents use more electricity than rural residents. Responding to economic growth , the government should prepare greater electricity capacity or induce higher tariffs to encourage electricity savings.Downloads
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