Price and income elasticity of residential electricity demand in Latin America and the Caribbean: an analysis using the meta-analysis method

Abstract

Understanding energy demand behavior in the context of price and income disparities is critical for the development and evaluation of public policies, business decisions, and cooperative agreement improvements. Therefore, this article has two objectives: (i) to identify the price and income elasticities of demand for residential electricity in Latin America and the Caribbean and (ii) to verify which are the main determinants of these elasticities. To achieve the proposed objectives, we used the meta-analysis and meta-regression methods, respectively. After collecting and filtering journal articles, we obtain a sample composed of 50 studies covering the period from 1979 to 2020. The results show that the average price elasticity for Latin America and Caribbean is approximately -0.36 and the average income elasticity is approximately 0.42. Furthermore, the identification of elasticities is systematically affected by the structure of the data, the estimation method used in the study, and the sampling period.