Energy Demand with the Flexible Double-Logarithmic Functional Form*

Gehuang D. Nan and Donald A. Murry

The Energy Journal, 1992, vol. 13, issue 4, 149-159

Abstract: A flexible double-logarithmic function form is developed to meet assumptions of consumer behavior. Then annual residential and commercial data (1970-87) are applied to this functional form to examine demand for petroleum products, electricity, and natural gas in California. The traditional double log-linear functional form has shortcomings of constant elasticities. The regression equations in this study, with varied estimated elasticities, overcome some of these shortcomings. All short-run own-price elasticities are inelastic and all income elasticities are close to unity in this study. According to the short-run time-trend elasticities, consumers ‘fuelpreference in California is electricity. The long-run income elasticities also indicate that the residential consumers will consume more electricity and natural gas as their energy budgets increase in the long run.

Keywords: Flexible functional form; Energy demand; oil; electricity; natural gas; California (search for similar items in EconPapers)
Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:13:y:1992:i:4:p:149-159

DOI: 10.5547/ISSN0195-6574-EJ-Vol13-No4-8

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