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The demand for natural gas in the Northeastern United States

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  • Gautam, Tej K.
  • Paudel, Krishna P.

Abstract

This paper examines the demand for natural gas in the residential, commercial, and industrial sectors of the Northeastern United States, comprising nine states and using annual state-level panel data over the period between 1997 and 2016. It applies panel unit root and cointegration tests, and then estimates the parameters using five alternative estimators: dynamic fixed effects (DFE), mean group (MG), pooled mean group (PMG), common correlated effect mean group (CCEMG), and augmented mean group (AMG). The panel unit root and cointegration tests show that the series are I (1), and cointegrated. The estimated results show that the long run own price elasticities for natural gas in residential, commercial, and industrial sectors are −0.14, −0.29, and −0.28, respectively. The cross price elasticities of fuel oil for natural gas demand in residential, commercial, and industrial sectors are 0.19, 0.52, and 0.24, respectively. The long run natural gas demand is not affected by income in all three sectors. The heating degree days (HDD) have significant positive effects on demand for natural gas in all three sectors.

Suggested Citation

  • Gautam, Tej K. & Paudel, Krishna P., 2018. "The demand for natural gas in the Northeastern United States," Energy, Elsevier, vol. 158(C), pages 890-898.
    • Handle: RePEc:eee:energy:v:158:y:2018:i:c:p:890-898
    DOI: 10.1016/j.energy.2018.06.092
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    2. Halim TATLI, 2022. "Long-term price and income elasticity of residential natural gas demand in Turkey," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(630), S), pages 101-122, Spring.
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    4. Gautam, Tej K. & Paudel, Krishna P., 2018. "Estimating sectoral demands for electricity using the pooled mean group method," Applied Energy, Elsevier, vol. 231(C), pages 54-67.
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    More about this item

    Keywords

    Augmented mean group; Cointegration; Residential; Commercial; Industrial sectors; Natural gas; Unit root;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General

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