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Functional form and aggregate energy demand elasticities: a nonparametric panel approach for 17 OECD countries
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE).
2013 (English)In: Energy Economics, ISSN 0140-9883, E-ISSN 1873-6181, Vol. 36, 19-27 p.Article in journal (Refereed) Published
Abstract [en]

This paper studies whether the commonly used linear parametric model for estimating aggregate energy demand is the correct functional specification for the data generating process. Parametric and nonparametric econometric approaches to analyzing aggregate energy demand data for 17 OECD countries are used. The results from the nonparametric correct model specification test for the parametric model rejects the linear, log-linear and translog specifications. The nonparametric results indicate that the effect of the income variable is nonlinear, while that of the price variable is linear but not constant. The nonparametric estimates for the price variable is relatively low, approximately -0.2. 

Place, publisher, year, edition, pages
2013. Vol. 36, 19-27 p.
Keyword [en]
Cointegration, Log-linear, Panel data and specification test
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:umu:diva-68914DOI: 10.1016/j.eneco.2012.11.026ISI: 000316240100002OAI: oai:DiVA.org:umu-68914DiVA: diva2:619789
Available from: 2013-05-06 Created: 2013-04-29 Last updated: 2017-12-06Bibliographically approved
In thesis
1. Essays on Energy Demand and Household Energy Choice
Open this publication in new window or tab >>Essays on Energy Demand and Household Energy Choice
2013 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of four self-contained papers related to energydemand and household cooking energy.Paper [I] examine the impact of price, income and non-economicfactors on gasoline demand using a structural time series model. Theresults indicated that non-economic factors did have an impact ongasoline demand and also one of the largest contributors to changes ingasoline demand in both countries, especially after the 1990s. Theresults from the time varying parameter model (TVP) indicated thatboth price and income elasticities were varying over time, but thevariations were insignificant for both Sweden and the UK. Theestimated gasoline trend also showed a similar pattern for the twocountries, increasing continuously up to 1990 and taking a downturnthereafter.Paper [II] studies whether the commonly used linear parametricmodel for estimating aggregate energy demand is the correctfunctional specification for the data generating process. Parametricand nonparametric econometric approaches to analyzing aggregateenergy demand data for 17 OECD countries are used. The resultsfrom the nonparametric correct model specification test for theparametric model rejects the linear, log-linear and translogspecifications. The nonparametric results indicate that the effect of theincome variable is nonlinear, while that of the price variable is linearbut not constant. The nonparametric estimates for the price variable isrelatively low, approximately −0.2.Paper [III] relaxed the weak separability assumption betweengasoline demand and labor supply by examining the effect of laborsupply, measured by male and female working hours on gasolinedemand. I used a flexible semiparametric model that allowed fordifferences in response to income, age and labor supply, respectively.Using Swedish household survey data, the results indicated that therelationship between gasoline demand and income, age and laborsupply were non-linear. The formal separability test rejects the null ofseparability between gasoline demand and labor supply. Furthermore,there was evidence indicating small bias in the estimates when oneignored labor supply in the model.Paper [IV] investigated the key factors influencing the choice ofcooking fuels in Ghana. Results from the study indicated thateducation, income, urban location and access to infrastructure werethe key factors influencing household’s choice of the main cookingfuels (fuelwood, charcoal and liquefied petroleum gas). The study alsofound that, in addition to household demographics and urbanization,the supply (availability) of the fuels influenced household choice forthe various fuels. Increase in household income was likely to increasethe probability of choosing modern fuel (liquefied petroleum gas andelectricity) relative to solid (crop residue and fuelwood) and transitionfuel (kerosene and charcoal).

Place, publisher, year, edition, pages
Umeå,Sweden: Umeå Universitet, 2013. 173 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 864
Keyword
Choice Probability, derivatives, energy policy, gasoline demand, propensity score, tax simulation, unobserved trend
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-79713 (URN)978-91-7459-690-8 (ISBN)
Public defence
2013-09-20, Samhällsvetarhuset, S205h, Umeå universitet, Umeå, 13:15 (English)
Opponent
Supervisors
Funder
Swedish Energy Agency
Available from: 2013-08-30 Created: 2013-08-29 Last updated: 2013-08-30Bibliographically approved

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