Key factors on household electricity consumption at Metropolitan Monterrey, Mexico

Abstract

This work studies the evolution of aggregate consumption of electricity in the Metropolitan Area of Monterrey, Nuevo Leon, Mexico. In particular, we quantify the impact generated by the growth of domestic users on the electricity consumption. Additionally, we estimate the sensitivity of consumption to price changes and the national economic activity indicator as a proxy measure of income of the area in absence of a regional indicator. Our analysis was conducted by a Cobb-Douglas demand function with time series from 1993 to 2010 in a monthly frequency and the Engel-Granger cointegration approach. Estimations indicate that one percentage increase in the number of households increases consumption in 0,61 percent. While price increases, demand services are reduced by 0,63 percent.