 Short- and long-run elasticities of electricity demand in the Korean service sectorKyoung-Min Lim, Seul-Ye Lim and Seung-Hoon Yoo () Energy Policy, 2014, vol. 67, issue C, 517-521 Abstract: This paper attempts to examine the electricity demand function in the Korean service sector using the annual data covering the period 1970–2011. The short- and long-run elasticities of electricity demand with respect to price and income are empirically estimated using a co-integration and error-correction model. The short- and long-run price elasticities are estimated to be −0.421 and −1.002, respectively. The short- and long-run income elasticities are computed to be 0.855 and 1.090, respectively. Electricity demand in the service sector is inelastic to changes in both price and income in the short-run, but elastic in the long-run. Therefore, it appears that a pricing policy is more effective than the direct regulation of reducing electricity demand in the long-run in order to stabilize the electricity demand in the service sector. Moreover, it is necessary to encourage a more efficient use of electricity to cope with increasing demand for electricity following economic growth because the electricity demand in the service sector is income-elastic in the long-run. Keywords: Elasticity; Electricity demand in service sector; Error-correction model (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:67:y:2014:i:c:p:517-521 DOI: 10.1016/j.enpol.2013.12.017 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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