The demand for electricity in Greece, 1961-1975: an empirical investigation
Frangakis, Elli E.
This study attempts to provide quantitative estimates of the influence of changes in economic variables (relative prices and activity indicators) on electricity demand in Greece over the period 1961-1975.\ud \ud The fact that e1ectricity is not a product yielding direct satisfaction but it is demanded as a fuel input into activities that do provide utility, and which use a capital stock of some durability, creates the need for a distinction between demand in the short-run and demand in the long-run. Moreover, total electricity demand is disaggregated into demand by the household, commercial and industrial sectors. This disaggregation rests upon the assumption that the response of different sectors to changes in the economic environment is unlikely to be the same.\ud \ud The quantitative estimates suggest that in general short-run demand appears to be price and income inelastic for the household and commercial sectors, whereas for the industrial sector the evidence suggests a price elasticity very close to unity and an activity indicator (Index of Industrial Production) elasticity greater than unity. Long-run demand appears to be inelastic with respect to price changes only in the household sector. The activity indicators elasticities for all sectors are well above unity.\ud \ud The long-run formulations permit, the calculation of the speed with which actual demand adjusts to desired demand. The estimates suggest that this speed is relatively fast in the case of residential demand and relatively slow in the case of industrial demand.