Residential energy consumption in the state of Georgia, 1988

Energy became a problem after the oil embargo of 1973. The price of electricity and other resources began to rise drastically. The price consumption decision will be examined in this paper. The theory of consumer behavior implies that if energy prices faced by the residen�tial consumer increased, then his demand for energy will fall, and consumers would consume more of the close substitutes in order to maximize the same level of utility. This study argues that price is an ineffective mechanism for regulating demand for electricity. Moreover, the impact of prices on the poor and elderly is very important because they spend a higher portion of their income on energy and they will be forced to reduce their consumption of energy. All these will be verified by the electricity estimates using the demand curve analysis. This analysis will focus on the estimation of a demand equation for Georgia. The variables of interest here are own price, income, price of substitutes, and heating and cooling degree days. Residential demand for electricity is a derived demand dependent on the existing stock of appliances and utilization rate of these appliances