Price elasticities of energy demand have become increasingly relevant in estimating the socioeconomic and environmental effects of energy policies or of other events with influence on the prices of energy goods. Since the 1970s a large number of academic papers have provided both short and long-term price elasticity estimates for different countries by using several models, data and estimation techniques. Yet the literature offers a rather wide range of estimates for the price elasticities of demand for energy. This paper quantitatively summarizes the recent, but still sizeable, empirical evidence on this matter to facilitate a sounder economic assessment of energy price changes. It does so by using meta-analysis to identify the main factors affecting the elasticity results, both short and long term, for energy in general as well as for specific products: electricity, natural gas, gasoline, diesel and heating oil. JEL Classification: C13, C83, Q41This piece of research carries out a meta-analysis with the procedure suggested by Nelson and Kennedy (2009) using the methodology of regression analysis (see also Stanley and Jarrell, 1989), that is, it performs a regression analysis employing the entire set of results selected from the literature and an extensive specification of the factors that determine these elasticities. The paper thus responds to the need to determine, as precisely as possible, the value of price elasticities of demand for energy in general as well as those for the demand of the abovementioned energy goods. As a secondary * . How sensitive to time period sampling is the asymmetric price response specification in energy demand modelling? Energy Economics, 40, 90-109. Agnolucci, P., 2009. The energy demand in the British and German industrial sectors: Heterogeneity and common factors. Energy Economics, 31, 175-187. Agostini, P., Botteon, M., Carraro, C., 1992. A carbon tax to reduce CO 2 emissions in Europe. Energy Economics, 14, 279-290. Ahmadian, M., Chitnis, M., Hunt, L.C., 2007. Gasoline demand, pricing policy and social welfare in the Islamic Republic of Iran, 31, 105-124.Ajanovic, A., Haas, R., 2012. The role of efficiency improvements vs. price effects for modeling passenger car transport demand and energy demand.
Using a Spanish database, we have explored the role of persistence in the decision of firms to implement product and process innovations and to develop those innovations. We assume that a company that is continuously engaged in some type of innovation activity will be encouraged to innovate, either for investment reasons or to enhance its market image. Because of the effects of persistence (state dependence) could be contaminated by unobserved heterogeneity, we use panel data, and make an effort to separate these effects. We demonstrate that persistence is important in both innovation decisions. Persistence in innovation increases at least 15% the probability to develop more innovations. A second important result is that the introduction of the alternative innovation increases the probability to innovate in a range from 2 to 4%; it implies that complementarities between innovations are also important in the decision to continue innovating in terms of absorbed synergies and capacities generated by the firm.
The purpose of this paper is to test for the presence of habit formation in consumption decisions using household panel data. We use the test proposed by Meghir and Weber (1996) and estimate the within -period marginal rate of substitution between commodities, which is robust to the presence of liquidity constraints. To that end, we use a Spanish panel data set in which households are observed up to eight consecutive quarters. This temporal dimension is crucial, since it allows us to take into account time invariant unobserved heterogeneity across households ("fixed effects") and, therefore, to investigate if the relationship between current and past consumption reflects habits or heterogeneity. Our results conf irm the importance of accounting for fixed effects when analyzing intertemporal consumption decisions allowing for time non-separabilities. Once fixed effects are controlled for and a proper set of instruments is used, the results yield supporting evidence of habit formation in the demand system of food at home, transport and services.
Using three waves of data from the European Community Household Panel, this paper estimates demand for physician services equations for 12 European countries. We focus on the selection of the most appropriate econometric specification for visits to general practitioners and to specialists among two-part and latent class models. The distinction between the demand of services from these two types of physicians allows us to distinguish cases in which two-part perform better than latent class models, evidence which is different from previous findings in the literature. The results suggest that latent class models are more appropriate than two-part models to estimate general practitioners utilisation while the opposite is found for visits to the specialists.
The purpose of this paper is to emphasise the importance of double‐hurdle models in the estimation of tobacco demand equations. Using data from the Spanish Family Expenditure Survey (EPF), Tobit, P‐Tobit and first hurdle dominance models are shown to be restrictive. This dataset also confirms the existence of separate individual decisions on participation and consumption. We propose to estimate a dependent version of a double‐hurdle model, although independence is not restrictive once additional powers of total expenditure are included in the specification of the second hurdle. Several misspecification tests are also conducted among the different models.
June 2009 *We are grateful to Iberdrola, the Galician Parliament, the Spanish Ministry of Science and Education and ERDF (projects SEJ2005-08783-C04-04 and SEJ2006-12939) and Xunta de Galicia (project INCITE08PXIB300207PR) for funding this piece of research. We also acknowledge the valuable assistance of Natalia Jorgensen and the comments and suggestions by Francisco Laverón and Gonzalo Sáenz-de-Miera. The authors are also thankful to Iberdrola Distribución S.A. and the Spanish Agency of Meteorology (Ministry of Environmental, Marine and Rural Affairs) for the information provided. However, we are responsible for any error or omission that may remain in the paper. This article only reflects the views of the authors and not necessarily those of the Instituto de Estudios Fiscales.
Sharp price fluctuations and increasing environmental and distributional concerns, among other issues, have led to a renewed academic interest in energy demand. In this paper we estimate, for the first time in Spain, an energy demand system with household microdata. In doing so, we tackle several econometric and data problems that are generally recognized to bias parameter estimates. This is obviously relevant, as obtaining correct price and income responses is essential if they may be used for assessing the economic consequences of hypothetical or real changes. With this objective, we combine data sources for a long time period and choose a demand system with flexible income and price responses. We also estimate the model in different sub-samples to capture varying responses to energy price changes by households living in rural, intermediate and urban areas. This constitutes a first attempt in the literature and it proved to be a very successful choice. _________________________________________________________________We have benefited from comments by Martin Browning. Financial support from the Spanish Ministry for Science and Education and ERDF (Projects BEC2002-04394-C02-02 and SEC2002-03095), and the Galician government (Project PGIDIT03PXIC30008PN) is also acknowledged. The authors remain solely responsible for any errors or omissions.
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