Impact of price variations on the consumption of electrical energy

This analysis is directed at looking at the impact of changing prices on the sectoral demand for electrical energy in the United States. By using a cross correlation test for unidirectional causality, it is shown that, in the case of the residential demand, the commercial demand and the industrial demand, the quantity consumed is affected by changing prices. The reverse is also true. Since bidirectional causality cannot be statistically rejected, any estimation of the demand for electrical energy must be peformed in a simultaneous framework to avoid specification errors and their associated problems.