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The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis

Author

Listed:
  • Enrica De Cian

    (School of Advanced Studies in Venice and Fondazione Eni Enrico Mattei)

  • Elisa Lanzi

    (School of Advanced Studies in Venice and Fondazione Eni Enrico Mattei)

  • Roberto Roson

    (University Ca’ Foscari of Venice and Fondazione Eni Enrico Mattei)

Abstract

This paper presents an empirical study of energy demand, in which demand for a series of energy goods (Gas, Oil Products, Coal, Electricity) is expressed as a function of various factors, including temperature. Parameter values are estimated econometrically, using a dynamic panel data approach. Unlike previous studies in this field, the data sample has a global coverage, and special emphasis is given to the dynamic nature of demand, as well as to interactions between income levels and sensitivity to temperature variations. These features make the model results especially valuable in the analysis of climate change impacts. Results are interpreted in terms of derived demand for heating and cooling. Non-linearities and discontinuities emerge, making it necessary to distinguish between different countries, seasons, and energy sources. Short- and long-run temperature elasticities of demand are estimated.

Suggested Citation

  • Enrica De Cian & Elisa Lanzi & Roberto Roson, 2007. "The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis," Working Papers 2007.46, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2007.46
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    References listed on IDEAS

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    More about this item

    Keywords

    Energy Demand; Cooling Heating Effect ; Temperature; Dynamic Panel;

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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