EconPapers    
Economics at your fingertips  
 

Price and expenditure elasticities of residential energy demand during urbanization: An empirical analysis based on the household-level survey data in China

Chuanwang Sun () and Xiaoling Ouyang

Energy Policy, 2016, vol. 88, issue C, 56-63

Abstract: Urbanization, one of the most obvious characteristics of economic growth in China, has an apparent “lock-in effect” on residential energy consumption pattern. It is expected that residential sector would become a major force that drives China's energy consumption after urbanization process. We estimate price and expenditure elasticities of residential energy demand using data from China's Residential Energy Consumption Survey (CRECS) that covers households at different income levels and from different regional and social groups. Empirical results from the Almost Ideal Demand System model are in accordance with the basic expectations: the demands for electricity, natural gas and transport fuels are inelastic in the residential sector due to the unreasonable pricing mechanism. We further investigate the sensitivities of different income groups to prices of the three types of energy. Policy simulations indicate that rationalizing energy pricing mechanism is an important guarantee for energy sustainable development during urbanization. Finally, we put forward suggestions on energy pricing reform in the residential sector based on characteristics of China's undergoing urbanization process and the current energy consumption situations.

Keywords: Urbanization; Residential energy demand; Expenditure elasticity; Price elasticity; Almost Ideal Demand System model (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421515301403
Full text for ScienceDirect subscribers only

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:eee:enepol:v:88:y:2016:i:c:p:56-63

DOI: 10.1016/j.enpol.2015.10.012

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-09-21
Handle: RePEc:eee:enepol:v:88:y:2016:i:c:p:56-63