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Residential energy demand in Australia: an application of dynamic OLS

  • Muhammad Akmal

    (Department of Economics, Australian National University)

  • David I. Stern

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

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 The dynamic OLS (DOLS) framework is used to estimate logarithmic demand equations with previously unpublished national-level quarterly data.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.

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File URL: http://een.anu.edu.au/download_files/eep0104.pdf
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Paper provided by Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program in its series Working Papers in Ecological Economics with number 0104.

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Date of creation: Oct 2001
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Handle: RePEc:anu:wpieep:0104
Contact details of provider: Web page: http://incres.anu.edu.au/EEP/wp.html

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  11. repec:dgr:kubcen:199056 is not listed on IDEAS
  12. Bartels, Robert & Fiebig, Denzil G & Nahm, Daehoon, 1996. "Regional End-Use Gas Demand in Australia," The Economic Record, The Economic Society of Australia, vol. 72(219), pages 319-31, December.
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  16. Rushdi, Ali Ahmed, 1986. "Interfuel substitution in the residential sector of South Australia," Energy Economics, Elsevier, vol. 8(3), pages 177-185, July.
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