The average hourly impact of price changes on household electricity consumption

Working paper 938

Abstract

This study evaluates the effect of marginal price changes on residential electricity consumption. The study is underpinned by hourly meter data that is matched to household level survey data in South Africa. It provides the first estimate of residential responses to price changes at the hourly level in a developing country. The price structure follows an incline block tariff allowing us to apply difference-in-differences. Our results uncover the expected negative relationship between price and electricity consumption, once we condition on both observed and unobserved confounding factors, especially temperature. We also find that relatively energy dependent households are less responsive to price changes than those less dependent.