Functional form and aggregate energy demand elasticities: A nonparametric panel approach for 17 OECD countries

Amin Karimu and Runar Brännlund

Energy Economics, 2013, vol. 36, issue C, 19-27

Abstract: 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.

Keywords: Cointegration; Log-linear; Panel data and specification test (search for similar items in EconPapers)
JEL-codes: C3 C4 Q4 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:36:y:2013:i:c:p:19-27

DOI: 10.1016/j.eneco.2012.11.026

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