State-Level Heterogeneity in the Price Elasticity of Demand for Residential Electricity
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2025-12-15
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Affordable, reliable electricity is essential for productive, healthy and thriving communities. Achieving this goal at least partly requires understanding the dynamic relationship between electricity prices and consumer demand is critical for utilities, regulators, and governments seeking to deliver affordable, reliable, and efficient energy. This paper presents updated estimates of a standard measure of price responsiveness in the US residential electricity market—price elasticity of demand for electricity (PEDE)—and explores how it varies across states.
The paper finds that residential electricity demand is relatively inelastic on average: a 10% price increase is associated with only a 1.3% decrease in consumption. However, there is substantial variation in the PEDE across states, even among states in the same region or electric power market. This variation suggests that differences in state-level policy decisions, such as the presence or absence of retail choice, alternative rate structures, and the degree of price transparency, may also shape estimates of the PEDE.
The authors find that recognizing and understanding the variation in price responsiveness across the country is crucial for effective rate design, targeted energy programs, and market regulation to improve affordability and efficiency in residential electricity markets.
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Weintraut, Ben, Eric Parajon, Trey Gowdy and J Ewing (2025). State-Level Heterogeneity in the Price Elasticity of Demand for Residential Electricity. Retrieved from https://hdl.handle.net/10161/33879.
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Trey Gowdy
Trey is a Research Lead for the Energy Data Analytics Lab at the Nicholas Institute for Energy, Environment & Sustainability. He supports the Nicholas Institute for Energy, Environment & Sustainability work through research, project management, and educational programs. This includes work on open energy data, transportation electrification in the Southeast, interdisciplinary energy and climate student programs, and more.
Trey holds a M.A. in public administration and a B.A. in political science from the University of North Florida. Trey has worked in state government clean energy and higher education sustainability programs at the Massachusetts Department of Energy Resources and Florida State University Sustainable Campus.
John Jackson Ewing
Jackson Ewing is director of energy and climate policy at the Nicholas Institute of Energy, Environment & Sustainability at Duke University. He is also an adjunct associate professor at the Nicholas School of the Environment and a faculty affiliate with the Duke Center for International Development at the Sanford School of Public Policy. He works closely with the Duke Kunshan University Environmental Research Center and International Masters of Environmental Policy programs to build policy research collaboration across Duke platforms in the United States and China.
Prior to joining Duke, Ewing was director of Asian Sustainability at the Asia Society Policy Institute in New York, where he led projects on Asian carbon market cooperation and sustainable resource development in the ASEAN Economic Community. He previously served as a MacArthur Fellow and head of the Environment, Climate Change and Food Security Program at Singapore’s S. Rajaratnam School of International Studies, and has worked throughout Asia with actors in government, the private sector, civil society, and international organizations.
Ewing publishes widely through a range of mediums and is a regular contributor to radio, television and print media. He holds a doctorate in environmental security and master's degree in international relations from Australia’s Bond University, and a bachelor’s degree in political science from the College of Charleston.Material is made available in this collection at the direction of authors according to their understanding of their rights in that material. You may download and use these materials in any manner not prohibited by copyright or other applicable law.