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Is the price elasticity of demand for coal in China increasing?

Paul Burke () and Hua Liao ()

China Economic Review, 2015, vol. 36, issue C, 309-322

Abstract: China's dependence on coal is a major contributor to local and global environmental problems. In this paper we estimate the price elasticity of demand for coal in China using a panel of province-level data for 1998–2012. We find that provincial coal demand has become increasingly price elastic. As of 2012 we estimate that this elasticity was in the range −0.3 to −0.7 in point estimate terms when responses over two years are considered. The results imply that China's coal market is becoming more suited to price-based approaches to reducing emissions. The elimination of coal consumption subsidies could reduce national coal use and related emissions by around 2%.

Keywords: Coal; Price elasticity; Demand; China; Provincial; Economic reform; Price reform (search for similar items in EconPapers)
JEL-codes: O13 Q41 P28 Q48 (search for similar items in EconPapers)
Date: 2015
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Working Paper: Is the price elasticity of demand for coal in China increasing? (2015) Downloads
Working Paper: Is the price elasticity of demand for coal in China increasing? (2015) Downloads
Working Paper: Is the Price Elasticity of Demand for Coal in China Increasing? (2015) Downloads
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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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