Industrial natural gas demand Income elasticity Price elasticity Panel data model FMOLS DOLS Dynamic panel data.This study aims to estimate industrial natural gas demand in 15 selected OECD countries over the period of 1991 to 2016, within the framework of dynamic panel data model. The long-run income and own price and cross-price elasticities of natural gas in industry sector were computed by using fully modified OLS and dynamic OLS approaches as they have taken care of endogeneity by adding leads and lags (DOLS) or nonparametric approach to deal with serial correlation (FMOLS) in the presence or absence of cointegration. The results indicated that in FMOLS approach income elasticity spans from 0.08 to 0.21 and price elasticity was ranged between -0.05 to -0.07 (respectively in model with constant &trend and constant only). So demand is inelastic to price and income both. While in DOLS approach income elasticity was equal 0.63 and 1.15 and price elasticity was -0.14 and -0.51 in models with constant only as well as model with constant & trend respectively. Due to the price inelasticity of natural gas in the industrial sector, changing the price of natural gas or other substitutes does not lead to dipping the consumption and CO2 emission and levying taxes on natural gas price or other substitutes will not change the consumption habit in industry sector.Contribution/ Originality: This paper"s primary contribution is finding that if price increase by means of levying taxes on natural gas which is used as one of the main energy sources in the industry sector of the selected OECD countries will result in plunging the demand or curtailing CO2 emission.
The inflation rate, which measured using consumer price index, can be separated into a combination of two persistent and temporary components. This separating is particularly important in analyzing inflation rate and policies to control it. In fact, without knowing the persistent component of inflation, called core inflation, quantitative targeting of inflation may not be accurate. Core inflation as a more persistent component can be measured stripping out the transitory movements in prices. The understanding of the behavior of the national core inflation rate series needs to understand provincial core inflation since the construction of the former is based on the provincial series. So, the purpose of this paper is the estimation of provincial and national core inflation in Iran. Core inflation is unobservable variable, so it estimated using Space State Model and Kalman Filter. Results show that average core inflation in all of the provinces, as well as Iran, is less than average underlying inflation. The standard deviation of core inflation in some provinces is more than underlying inflation. While core inflation in other provinces, as well as Iran, has more standard deviation as compared to underlying inflation.
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