A Household’s Power Load Response to a Change in the Electricity Pricing Scheme: An Expanded Microeconomic-physical Approach

Energy economists are interested in how changes in electricity prices prompt a response in end-user electricity demand. If historical prices are low or seldom change, it becomes difficult to estimate price elasticities statistically , especially in the short-run. Thus, a framework that merges the physical equations that govern how electricity is consumed, and a utility-maximizing household the responds to varying expenditures on electricity, is used.