Energy price elasticities for residential consumers is probably the most important variable to define policies regarding concerns about sustainability, efficiency and equitability.<\/p>\n
However, estimating consumer response to price changes is complex due to simultaneous demand shocks, regulatory constraints and complex consumer response for this market.<\/p>\n
This paper estimates the short- and long-term price elasticity of residential energy consumption through a natural experiment from the implementation of a Social Electricity<\/p>\n
Tariff in Tucum\u00e1n, Argentina. The policy, aimed at assisting vulnerable households,
\nprovided a subsidy to the fixed charge of the electricity tariff but initially reached only
\na small set of highly vulnerable users. A difference-in-differences approach is employed,
\nwith low-income households initially not covered by the social tariff serving as the control
\ngroup. Our findings indicate that price elasticity is inelastic, with a more pronounced
\neffect among lower-consumption users. This study provides, to our knowledge, the first
\nquasi experimental estimate of short- and long-term price elasticity for Latin America,
\noffering valuable insights for the design of energy policies.<\/p>\n
Keywords: Price elasticity, Residential energy consumption, Social Tariff, Energy
\nsubsidy, Difference-in-Differences, Heterogeneous effects, Short- and Long-term.
\nJEL: C23, D12, H31, Q41, Q48.<\/p>\n
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