 The wood pellet market in Austria: A structural market model analysisChrista Kristöfel, Christoph Strasser, Erwin Schmid and Ulrich B. Morawetz Energy Policy, 2016, vol. 88, issue C, 402-412 Abstract: EU bioenergy policies and oil price hikes have resulted in a significant increase of installed pellet boilers for residential heating. Hence, European demand for wood pellets has been growing faster and more steadily than supply leading to rising market prices in recent years. This article presents an econometric analysis of demand and supply of wood pellets in the residential heating sector in Austria, one of the most dynamic markets for residential pellets. Annual and monthly time series data between 2000 and 2014 are used in a two-stage least-squares (2SLS) regression to estimate supply and demand elasticities of wood pellets. In all model specifications, pellets demand is found to be inelastic (from −0.66 to −0.76) and pellets supply unit-elastic (from 1.03 to 1.18). Thus, consumers are highly exposed to price changes resulting from supply shocks. Policies which support investments in pellet boilers will shift the demand of wood pellets and likely leading to higher prices for consumers. Keywords: Q21; Wood pellet market; Elasticities; Econometric partial equilibrium 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:88:y:2016:i:c:p:402-412 DOI: 10.1016/j.enpol.2015.10.039 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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