Effect of varying sample sizes on electricity prices: European case

The energy prices vary from country to country, which is, to large extent depend upon the country specific taxes, geopolitical condition, environmental protection cost, and variations in demand and supply of energy. The purpose of this study is to propose a macroeconomic model over the European countries (over three different sample sizes) to understand the electricity price determinants. In the light of this, to check the variations in the results, we studied three samples of European Union (EU-27, EU-15 and EU-11) to understand the determinants of retail electricity prices for households and industries. EU-27 is a large sample consisting of diverse European countries. EU-15 sample is relatively smaller compared to the EU-27, whereas, the EU-11 sample consists of countries with the largest share of renewable electricity. Thus, our research aims to address the following question: For electricity price determinants, is there a major difference in result obtained through a European sample of EU-27, EU-15 and EU-11? With electricity price of households and electricity as independent variables, we proposed a macroeconomic model with 06 versions. We studied the effect of renewable energy generation, carbon emissions, and regulatory perceptions on dependent variable through panel data random effect modelling over the period 1995-2011. The results obtained suggest a significant change in results over three sample sizes. However, across the three sample sizes, cleaner energy (with less carbon emissions) always presented the similar effect statistically.