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OECD Energy Demand: Modelling Underlying Energy Demand Trends using the Structural Time Series Model

Author

Listed:
  • Arqam Al-Rabbaie

    (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey)

  • Lester C Hunt

    () (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey)

Abstract

Aggregate energy demand functions for 17 OECD countries are estimated with data for 1960-2003 using the Structural Time Series Model (STSM) thus allowing for a stochastic Underlying Energy Demand Trend (UEDT). It is found that the estimated long-run income and price elasticities range from 0.5 to 1.5 and -0.1 to -0.4 respectively. Furthermore the stochastic form for the UEDT is preferred for all countries suggesting a wide variation in the exogenous effects of energy saving technical progress in addition to other pertinent exogenous factors such as economic structure, consumer preferences, and socio-economic influences.

Suggested Citation

  • Arqam Al-Rabbaie & Lester C Hunt, 2006. "OECD Energy Demand: Modelling Underlying Energy Demand Trends using the Structural Time Series Model," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 114, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
  • Handle: RePEc:sur:seedps:114
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    File URL: http://www.seec.surrey.ac.uk/Research/SEEDS/SEEDS114.pdf
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    References listed on IDEAS

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    1. Lester C. Hunt & Guy Judge & Yasushi Ninomiya, 2003. "Modelling underlying energy demand trends," Chapters,in: Energy in a Competitive Market, chapter 9 Edward Elgar Publishing.
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    Cited by:

    1. Roberto Roson & Enrica de Cian & Elisa Lanzi, 2007. "The Impact of Temperature Change on Energy Demand a Dynamic Panel Analysis," Working Papers 2007_06, Department of Economics, University of Venice "Ca' Foscari".
    2. repec:eee:enepol:v:114:y:2018:i:c:p:123-133 is not listed on IDEAS
    3. Costantini, Valeria & Martini, Chiara, 2010. "The causality between energy consumption and economic growth: A multi-sectoral analysis using non-stationary cointegrated panel data," Energy Economics, Elsevier, vol. 32(3), pages 591-603, May.
    4. Adeyemi, Olutomi I. & Broadstock, David C. & Chitnis, Mona & Hunt, Lester C. & Judge, Guy, 2010. "Asymmetric price responses and the underlying energy demand trend: Are they substitutes or complements? Evidence from modelling OECD aggregate energy demand," Energy Economics, Elsevier, vol. 32(5), pages 1157-1164, September.

    More about this item

    Keywords

    OECD Energy Demand; Modelling; Underlying Stochastic Trends;

    JEL classification:

    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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