An economic analysis of the estimation of electricity demand in Iran

The results of this study suggest that residential electricity consumption is independent of price change, at least in the short-run. Based on data from 1996 to 2008, the researcher has found price elasticity to be an insignificant determinant of residential electricity demand. The researcher believes that this result is feasible, for two reasons. First, consumption of electricity in Iran starts from a relatively low base, meaning that electricity expense constitutes only a small portion of the household budget. Second, the price level of electricity is very low and does not represent the costs it should.