This study estimates the electricity demand function for the residential sector of South Korea with the aim of examining the effects of improved energy efficiency, structural factors and household lifestyles on electricity consumption. In the study, time series data for the period from 1973 to 2007 is used in a structural time series model to estimate the long-term price and income elasticities and annual growth of underlying energy demand trend (UEDT) at the end of the estimation period. The result shows a long-term income elasticity of 1.33 and a long-term price elasticity of -0.27% with -0.93% as the percentage growth of UEDT at the end of the estimation period. This result suggests that, in order to encourage energy efficiency in the residential sector, the government should complement the market based pricing policies with non-market policies such as minimum energy efficiency standards and public enlightenment. (C) 2009 Elsevier Ltd. All rights reserved.