How price responsive is industrial demand for natural gas in the United States?

Raymond Li, Chi-Keung Woo, Asher Tishler and Jay Zarnikau ()

Utilities Policy, 2022, vol. 74, issue C

Abstract: Our panel data analysis of the price responsiveness of industrial demand for natural gas in the United States utilizes five parametric specifications and 10,944 monthly observations for the lower 48 states in 2001–2019 to document statistically significant (p-value ≤ 0.05) static own-price elasticity estimates of −0.027 to −0.062, short-run −0.029 to −0.125, and long-run −0.060 to −0.179. These estimates with relatively small absolute values support the continuation of energy efficiency standards and demand-side-management programs for deep decarbonization. Further, diverse price responsiveness among heterogeneous industrial customers suggests using demand-response programs to efficiently allocate the limited supply available during a natural gas shortage.

Keywords: Industrial natural gas demand; Price elasticity; Panel data analysis; Cross-section dependence; United States (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:74:y:2022:i:c:s095717872100151x

DOI: 10.1016/j.jup.2021.101318

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