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The energy demand in the British and German industrial sectors: Heterogeneity and common factors

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  • Agnolucci, Paolo
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    Abstract

    This paper estimates energy demands for the German and British industrial sectors over the 1978-2004 and the 1991-2004 samples. From time series models we can conclude that there is a considerable variation in the value of the coefficients across sectors, even though energy demands with sensible parameters can rarely be estimated. When using a panel approach, the ability of some estimators to allow for diversity across subsectors was an important factor in explaining the estimates for price elasticity. On the other hand, correlation across panel members or common factors did not markedly influence our results. With regard to the estimated parameters, our preferred choice for elasticity of economic activity and price in the longer sample is 0.52 and - 0.64. Similar values are found in the case of the shorter samples. Bearing in mind the high price elasticity, energy taxes can be considered an effective strategy for reducing energy consumption.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 31 (2009)
    Issue (Month): 1 (January)
    Pages: 175-187

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    Handle: RePEc:eee:eneeco:v:31:y:2009:i:1:p:175-187

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    Web page: http://www.elsevier.com/locate/eneco

    Related research

    Keywords: Panel estimators Cross sectional dependence Energy demand Price elasticity Industrial sectors;

    References

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    Cited by:
    1. Xavier Labandeira & Baltazar Manzano, 2012. "Some Economic Aspects of Energy Security," European Research Studies Journal, European Research Studies Journal, vol. 0(Special I), pages 47-64.
    2. Olutomi I Adeyemi & Lester C. Hunt, 2013. "Accounting for asymmetric price responses and underlying energy demand trends in OECD industrial energy demand," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 142, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
    3. Lescaroux, François, 2011. "Dynamics of final sectoral energy demand and aggregate energy intensity," Energy Policy, Elsevier, vol. 39(1), pages 66-82, January.
    4. Roula Inglesi-Lotz, 2012. "The sensitivity of the South African industrial sector’s electricity consumption to electricity price fluctuations," Working Papers 201225, University of Pretoria, Department of Economics.
    5. Zhou, Sheng & Kyle, G. Page & Yu, Sha & Clarke, Leon E. & Eom, Jiyong & Luckow, Patrick & Chaturvedi, Vaibhav & Zhang, Xiliang & Edmonds, James A., 2013. "Energy use and CO2 emissions of China's industrial sector from a global perspective," Energy Policy, Elsevier, vol. 58(C), pages 284-294.

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