Fuel Demand Elasticities for Energy and Environmental Policies Indian Sample Survey Evidence
AbstractIndia has been running large-scale interventions in the energy sector over the last decades. Still, there is a dearth of reliable and readily available price and income elasticities of demand to base these on, especially for domestic use of traditional fuels. This study uses the linear approximate almost ideal demand system (LA-AIDS) using micro data of more than 100,000 households sampled across India. The LA-AIDS model is expanded by specifying the intercept as a linear function of household characteristics. Marshallian and Hicksian price and expenditure elasticities of demand for four main fuels are estimated for both urban and rural areas by different income groups. These can be used to evaluate recent and current energy policies. The results can also be used for energy projections and carbon dioxide simulations given different growth rates for different segments of the Indian population.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Energy Working Papers with number 22501.
Date of creation: Jan 2006
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LA-AIDS; fuel; India; income; price; elasticities; NSSO data;
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