Cover: Regional Differences in the Price-Elasticity of Demand For Energy

Regional Differences in the Price-Elasticity of Demand For Energy

Published Nov 1, 2005

by Mark A. Bernstein, James Griffin

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The Department of Energy has a series of programs intended to spur development and adoption of energy-efficient technologies. This report examines how trends in the energy market may vary at the state and regional levels, and how price-elasticity of demand (a measure of how demand responds to price), varies at the national, regional, state, and utility levels. To determine if regional, state, or sub-state characteristics could affect the size of the impact of energy-efficient technologies on energy prices, supply, and consumption, it is necessary to examine how individual factors-such as climate, supply constraints, energy costs, and demand for natural gas-might affect the extent of this impact. Three energy-demand components are addressed in this report: electricity use in the residential sector, natural gas use in the residential sector, and electricity use in the commercial sector. The goal of this research is to determine whether state- and regional-level differences were significant enough to recommend to the Department of Energy the disaggregation of data by state or region when estimating the potential benefits of energy-efficient technologies.

The research described in this report was conducted under the auspices of the Environment, Energy, and Economic Development Program (EEED) within RAND Infrastructure, Safety, and Environment (ISE), a division of the RAND Corporation, for the National Renewable Energy Laboratory.

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