Price and output elasticities of energy demand for industrial sectors in OECD countries

Boyoon Chang, Sung Jin Kang, Tae Yong Jung

Research output: Contribution to journalArticlepeer-review

21 Citations (Scopus)

Abstract

The price and output elasticities of energy demand continue to be of interest to academia and policy institutions, having been estimated in previous studies. However, the estimated results show some inconsistencies, especially at the sectoral level, across countries. Based on our conjecture that those inconsistencies are mainly due to the effect of contingent energy intensities and partially to different units of analysis, we narrowed the analysis to the industry level and classified 16 industries into energy-intensive and less energy-intensive groups. The effects of price and output on energy demand were then compared between these two groups using 274 industry panel data across 20 Organization for Economic Cooperation and Development (OECD) countries from 1978 to 2013. The results showed that the price elasticity of energy demand was consistently lower in the energy-intensive group than in the less energy-intensive group, whereas the output elasticity of energy demand was higher in the energy-intensive group than in the less energy-intensive group. Using panel differences and system generalized method of moments estimations, the dynamic elasticities of energy demand were also estimated. Energy demand in reaction to both price and output changes appeared to be more elastic in the long term than in the short term for both energy-intensive and less energy-intensive groups. These findings could be a useful reference for policy makers to deploy separate energy policies for different industries aiming for different temporal effects.

Original languageEnglish
Pages (from-to)1786
Number of pages1
JournalSustainability (Switzerland)
Volume11
Issue number6
DOIs
Publication statusPublished - 2019

Bibliographical note

Publisher Copyright:
© 2019 by the authors. Licensee MDPI, Basel, Switzerland.

All Science Journal Classification (ASJC) codes

  • Computer Science (miscellaneous)
  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Environmental Science (miscellaneous)
  • Energy Engineering and Power Technology
  • Hardware and Architecture
  • Computer Networks and Communications
  • Management, Monitoring, Policy and Law

Fingerprint

Dive into the research topics of 'Price and output elasticities of energy demand for industrial sectors in OECD countries'. Together they form a unique fingerprint.

Cite this