This paper analyses the causes of the unusual drop in electricity consumption in households in Chile during 2008. Changes in income, the price of energy and the price of the substitute explain 8% of the actual drop in consumption. Over 50% of the fall is explained by two of the measures taken by the government: the energy-saving campaign and the planned reduction in the nominal voltage. Other measures included electricity saving rebates and changing the daylight saving time. Had the authority not taken these measures the price of electricity would have had to rise 15% more to induce a similar reduction of household’s consumption.
Instituto de Economía - Facultad de Ciencias Económicas y Administrativas - Pontificia Universidad Católica de Chile
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