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Short run and long run dynamics of residential electricity consumption: Homogeneous and heterogeneous panel estimations for OECD

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  • Bilgili, Faik
  • Pamuk, Yalçın
  • Halıcı Tülüce, Nadide Sevil

Abstract

The 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.

Suggested Citation

  • Bilgili, Faik & Pamuk, Yalçın & Halıcı Tülüce, Nadide Sevil, 2010. "Short run and long run dynamics of residential electricity consumption: Homogeneous and heterogeneous panel estimations for OECD," MPRA Paper 33291, University Library of Munich, Germany, revised Jun 2011.
    • Handle: RePEc:pra:mprapa:33291
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    File URL: https://mpra.ub.uni-muenchen.de/33291/1/MPRA_paper_33291.pdf
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    References listed on IDEAS

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    6. Peter Pedroni, 2000. "Fully Modified OLS for Heterogeneous Cointegrated Panels," Department of Economics Working Papers 2000-03, Department of Economics, Williams College.
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    Cited by:

    1. Wang, Zhaohua & Lu, Milin & Wang, Jian-Cai, 2014. "Direct rebound effect on urban residential electricity use: An empirical study in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 124-132.

    More about this item

    Keywords

    electricity consumption; elasticities; homogeneous and heterogeneous variance structures; panel error correction model; panel dynamic ordinary least squares;

    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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