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Residential energy demand in Australia: an application of dynamic OLS

Author

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  • Muhammad Akmal

    (Department of Economics, Australian National University)

  • David I. Stern

    (Centre for Resource and Environmental Studies, Australian National University)

Abstract

This paper reports estimates of the long-run elasticities of residential demand for electricity, natural gas and other fuels for Australia. The dynamic OLS (DOLS) framework is used to estimate logarithmic demand equations with previously unpublished national-level quarterly data. Significant substitution possibilities are found between electricity and gas and between electricity and other fuels. However, the cross-price elasticity of gas with respect to the price of residual fuels is negative. Our results are similar to other Australian and North American estimates but are more theoretically consistent than previous Australian estimates. We confirm that Australian residential energy demand is much more price responsive than North American residential energy demand.

Suggested Citation

  • Muhammad Akmal & David I. Stern, 2001. "Residential energy demand in Australia: an application of dynamic OLS," Working Papers in Ecological Economics 0104, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program.
  • Handle: RePEc:anu:wpieep:0104
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    References listed on IDEAS

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    Cited by:

    1. Chandan Sharma & N.R. Bhanumurthy, 2011. "Estimating Infrastructural Investment Needs for India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 5(2), pages 221-243, May.
    2. Md. Shahiduzzaman & Khorshed Alam, 2014. "A reassessment of energy and GDP relationship: the case of Australia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(2), pages 323-344, April.
    3. Narayan, Paresh Kumar & Smyth, Russell, 2005. "The residential demand for electricity in Australia: an application of the bounds testing approach to cointegration," Energy Policy, Elsevier, vol. 33(4), pages 467-474, March.
    4. Nababan, Tongam Sihol & Simanjuntak, Juara, 2008. "Aplikasi Willingness To Pay Sebagai Proksi Terhadap Variabel Harga: Suatu Model Empirik Dalam Estimasi Permintaan Energi Listrik Rumah Tangga
      [The Application of Willingness To Pay As A Proxy To Va
      ," MPRA Paper 49155, University Library of Munich, Germany.

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