Long-run elasticities are critical inputs for welfare analysis, demand forecasting, and policy evaluation. But there is a dearth of empirical long-run elasticity estimates, leading much of the literature to use short-run estimates in their place. In this paper, I leverage a novel source of exogenous and persistent price variation to estimate the long-run price elasticity of demand for residential electricity consumers. In this setting, consumers are much more responsive to prices in the long run than in the short run, with elasticity estimates of -2.4 and -0.36 respectively. I explore the mechanisms driving this difference and find that in the long run, consumers respond differently to temperature across price regimes. Furthermore, low-income consumers are particularly responsive to prices in the long run, emphasizing the importance of bill salience for low-income households. These findings highlight the importance of setting electricity prices that reflect social marginal costs, and suggest that retail electricity prices can play an important role in inducing conservation.

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