Abstract
This paper provides an example of several modeling and econometric advances used in the panel estimation of energy demand elasticities. The paper models the demand of total, industrial, and transport energy consumption and residential and commercial electricity consumption by analyzing US state-based panel data. The paper employs recently developed dynamic panel methods that address heterogeneity, nonstationarity, and cross-sectional dependence. In addition, the paper (i) considers possible nonlinear relationships between energy consumption and income without employing polynomial transformations of integrated income; and (ii) allows for and calculates possible asymmetric relationships between energy consumption and price. Finally, the paper models energy efficiency improvements by a nonlinear time trend. To our knowledge no other paper has combined all of the econometric and modeling advances that are applied here. Most of the results conformed to expectations; however, limited to no evidence of nonlinearities and asymmetries were uncovered.
Highlights
This short paper models the demand of energy consumption at several different levels of aggregation by analyzing US state-based panel data and by using methods that address heterogeneity, nonstationarity, and cross-sectional dependence
This paper modeled the demand of total, industrial, and transport energy consumption and residential and commercial electricity consumption by analyzing US state-based panel data and by using methods that address heterogeneity, nonstationarity, and cross-sectional dependence
Most of the results conformed to expectations
Summary
This short paper models the demand of energy consumption at several different levels of aggregation by analyzing US state-based panel data and by using methods that address heterogeneity, nonstationarity, and cross-sectional dependence. The paper models the demand of total, industrial, and transport energy consumption and residential and commercial electricity consumption. The paper (i) considers possible nonlinear relationships between energy consumption and income, and (ii) allows for and calculates possible asymmetric relationships between energy consumption and price. The paper models energy efficiency improvements by a nonlinear time trend. Estimating income and price elasticities for energy consumption is a popular subject in applied economics (e.g., see Graham and Glaister 2002 for a review of transport-focused studies).
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
