OECD Energy Demand: Modelling Underlying Energy Demand Trends using the Structural Time Series Model

Arqam Al-Rabbaie and Lester Hunt
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Arqam Al-Rabbaie: Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey

No 114, Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) from Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey

Abstract: Aggregate energy demand functions for 17 OECD countries are estimated with data for 1960-2003 using the Structural Time Series Model (STSM) thus allowing for a stochastic Underlying Energy Demand Trend (UEDT). It is found that the estimated long-run income and price elasticities range from 0.5 to 1.5 and -0.1 to -0.4 respectively. Furthermore the stochastic form for the UEDT is preferred for all countries suggesting a wide variation in the exogenous effects of energy saving technical progress in addition to other pertinent exogenous factors such as economic structure, consumer preferences, and socio-economic influences.

Keywords: OECD Energy Demand; Modelling; Underlying Stochastic Trends (search for similar items in EconPapers)
JEL-codes: O57 Q41 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2006-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:sur:seedps:114

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