The flexibility of household electricity demand over time

Empirical estimates of long run effects on residential electricity demand f rom changes in the electricity price are usually estimated by cross-section al variation in the current stock of electric house hold appliances across households at a certain point in time. Here, we use a discrete-continuous a pproach modeling the long run effects by investments in new appliances. We apply the annual Norwegian Survey of Consumer Expenditure for the period 19 75 to 1994 to estimate the short and long run own price elasticities in the two approaches, We find the estimated long run elasticity only slightly mo re price elastic than the short run. We also find that the long run elastic ity does not differ significantly between the two approaches. The reason fo r both results is that, since there is no alternative source of energy for these appliances, there are no substitution effects, (C) 2001 Elsevier Scie nce B.V. All rights reserved. JEL classification: D13.