Short run and long run dynamics of residential electricity consumption: Homogeneous and heterogeneous panel estimations for OECD
AbstractThe purpose of this paper is to reveal the short run and long run dynamics of residential electricity consumption for 11 OECD countries within annual period 1979-2006. To this end, this paper first explores the findings from related literature evidence and, later, follows panel cointegration equations (CEs) and panel error correction models (ECMs). CEs give long run relations of the variables in residential electricity demand function. ECMs include both long run and short run parameter estimates of the per capita residential electricity demand in terms of residential electricity price, residential light fuel oil price, residential natural gas price and per capita income. For both ECs and ECMs, the techniques of panel OLS, panel adjusted OLS and panel dynamic OLS are utilized. Finally, this paper yields short term and long term elasticities of residential electricity consumption together with error correction terms through homogeneous and heterogeneous variance structures.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33291.
Date of creation: Nov 2010
Date of revision: Jun 2011
electricity consumption; elasticities; homogeneous and heterogeneous variance structures; panel error correction model; panel dynamic ordinary least squares;
Find related papers by JEL classification:
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
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