Price elasticity of electricity revisited: A meta-analysis

This meta-analysis synthesizes 4,521 elasticity estimates drawn from 413 studies to examine the presence of publication and endogeneity bias in the literature. We coded over 100 study-level variables to assess how electricity consumers respond to price changes. Our results show that electricity demand is price inelastic, with an average short-run elasticity of -0.231 and average long-run elasticity of -0.532. However, after correcting for publication bias, the short-run elasticity declines in magnitude to -0.116, while the long-run elasticity adjusts to -0.303. Using Bayesian model averaging, we explore substantial heterogeneity in elasticity estimates. Factors such as declining tariff structures, demographic characteristics, fuel usage controls, daylight hours, and citation frequency significantly affect reported elasticities. In contrast, variables related to average and marginal electricity prices and time-of-use tariffs contribute minimally to the observed variation.