Residential demand for electricity in El Salvador : an application of a Quasi-Newton algorithm to the estimation of the transformation parameters of a generalized Box-Cox form

The purpose of this work was to estimate a generalized form equation for residential electricity demand in El Salvador, and to identify the most appropriate demand-side management options for that sector. A Quasi-Newton algorithm was applied for the estimation of the transformation parameters of the generalized Box-Cox form. This technique was shown to be superior to the commonly use grid search in terms of accuracy and computational effort. The estimations show that price of electricity is not a significant determinant of residential electricity consumption in El Salvador, while per capita income and availability of the service have a significant positive effect on household consumption of electricity. The responsiveness of consumers to price changes is expected to increase slightly as prices increase. After an analysis of existing alternatives for electricity demand-side management and of the situation of the country, it was recommended that time-of-use tariff schemes and energy-efficiency promotion programs be considered and implemented by El Salvador's electric utility.