Short and long-run elasticities in US residential electricity demand: a co-integration approach

Co-integration techniques show promise in the analysis of short- and long-run effects of economic variables on energy use. We use these techniques to develop an error correction model of annual US residential electricity demand. We construct equipment stock indices and estimate the model for 1949–1993. Our analysis suggests a structural shift in consumption during the 1960s. We discuss reasons for this shift, report the short- and long-run elasticities, provide forecasts for 1994–1995, and compare the model's forecasts with other published forecasts.