Asymmetric price response of industrial electricity demand in India |
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| Affiliation: | 1. School of Humanities, Social Sciences and Management, Indian Institute of Technology Bhubaneswar, India;2. The University of Danang, University of Economics, Danang, Viet Nam;1. Faculty of Economics and Management, University of Maroua, Cameroon;2. Centre d’Etudes et de Recherche en Management et Economie, Dschang, Cameroon;3. Ghana Institute of Management and Public Administration, Ghana;4. Faculty of Economics and Management, University of Dschang, Cameroon;1. Evangel University Akaeze, Nigeria;2. Department of Economics, Nnamdi Azikiwe University, Awka, Nigeria;3. Strategy, Execution and Evaluation (SEE) Office, Awka, Nigeria;4. Department of Economics, Banking and Finance, Gregory University, Uturu, Nigeria;5. Department of Economics, Chukwuemeka Odumegwu Ojukwu University, Igbariam, Nigeria;6. Entrepreneurial /Skills Development Centre/Enterprise Venture, Gregory University, Uturu, Abia State, Nigeria;1. School of Economics and Management, Beijing University of Technology, Beijing, 100022, China;2. Faculty of Commerce, Damietta University, Damietta, 22052, Egypt;3. Faculty of Economics and Political Science, Cairo University, Giza, 12613, Egypt;4. National Center for Social and Criminological Research, Giza, 11561, Egypt;5. College of Applied Sciences, Beijing University of Technology, Beijing, 100022, China;1. School of Electrical Engineering, Vellore Institute of Technology, Chennai Campus, Tamil Nadu, India;2. Electrical and Electronics Engineering, National Institute of Technology, Puducherry, Karaikal, India |
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| Abstract: | This paper analyses the asymmetric effects of electricity prices on industrial electricity demand in India from 1981 to 2016 using the two-threshold nonlinear autoregressive distributed lag (NARDL) model. The results show that customers react more strongly to a large price cut than a large price increase, whereas a small price change does not affect electricity consumption. A large price decrease, which raises the quantity demanded by a higher percentage, makes it more challenging to reach net-zero emissions as electricity generation relies mainly on fossil fuels. Since demand is inelastic for price increases, a large price hike minimally reduces electricity consumption. |
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| Keywords: | Price asymmetry Output elasticity Electricity demand |
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