The structure of Australian residential energy demand
Muhammad Akmal and
David Stern ()
Additional contact information
Muhammad Akmal: Department of Economics, Australian National University
Working Papers in Ecological Economics from Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program
This paper presents the first national-level econometric estimates of the residential energy demand system for Australia. We estimate an Almost Ideal (AI) demand system for electricity, gas, and other miscellaneous fuels (mainly oil and wood) using quarterly data for both the country as a whole and for a panel of the five most populous States. The national data set covers the period from 1969 Q3 to 1998 Q2, while the state level data is only available from 1984 Q3 onwards. According to the national-level data, the pairs of electricity and miscellaneous fuels and gas and miscellaneous fuels are significant substitutes, whereas electricity and gas - the two main fuels - may be complements. The panel model, in contrast, finds significant substitution possibilities between gas and miscellaneous fuels only. The cross-price elasticities between electricity and gas are positive but not significant. The gas own-price elasticity is zero in the national model and unit elastic in the panel model. A national model estimated over the same shorter time period still shows complementarity between electricity and natural gas but most results are insignificant. Both large time-series and cross-sectional dimensions are valuable in estimating elasticities. Compared to North American estimates, our results show greater own price and income elasticities for natural gas and the miscellaneous category. They also show more substitutability between natural gas and the miscellaneous category.
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:anu:wpieep:0101
Access Statistics for this paper
More papers in Working Papers in Ecological Economics from Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program
Series data maintained by Jack Pezzey ().