A Review of Energy Demand Models (in Persian)

Nasser Khiabani and Solaleh Tavassoli ()
Additional contact information
Solaleh Tavassoli: Ph.D. Student of Economics, Allameh Tabataba’i University. Tehran, Iran.

The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), 2020, vol. 25, issue 3, 65-94

Abstract: Energy demand modeling is one of the main challenging issues for energy experts. This study attempts to identify the gaps and differences in the energy demand modeling literature. More specifically it concentrates on the properties of two approaches: "single equation" and "demand system", which are commonly used in this area. Our review indicates that the single-equation approach, despite its simplicity for estimating parameters, suffers from severe problems, such as endogeneity and instability in parameters. However, the serious problem with this approach is that its specification has not been supported by the rigorous microeconomic theory. On the other hand, the energy demand system model is explicitly derived from the microeconomic theory that makes it possible to derive own- and cross-price elasticities of energy fuels and consider inter-fuel substitution. However, the major problem of this approach is that the demand elasticity estimates are more sensitive to selecting functional specifications. We investigate and compare the properties of the two common functional forms in energy demand systems namely, translog and linear logit model. Our results indicate that the linear logit model, under theoretical regularity conditions, can provide more convenient estimates of demand elasticities compared to the translog functional form.

Keywords: Demand Elasticity; Inter-fuel Substitution; Translog Functional Forms; Linear Logit Model; Dynamic Models. (search for similar items in EconPapers)
JEL-codes: C2 C5 D2 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://jpbud.ir/article-1-1965-en.pdf (application/pdf)
http://jpbud.ir/article-1-1965-en.html (text/html)
http://jpbud.ir/article-1-1965-fa.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:auv:jipbud:v:25:y:2020:i:3:p:65-94

Access Statistics for this article

More articles in The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه) from Institute for Management and Planning studies Contact information at EDIRC.
Bibliographic data for series maintained by Nahid Jebeli ( this e-mail address is bad, please contact ).