This paper aims to investigate the determinants of water demand in Kuwait and assess their impact on consumption. To do this, we applied the cointegration regression and the error correction model (ECM) on annual time series data, covering the period from 1972 to 2019. We found that the price elasticity for fresh water demand in Kuwait is negative and elastic in the long run (-1.095), which is consistent with the existing literature. Also, we found that the income elasticity for demand was positive in the long run (0.234), however, no short run effect was found for either price or income. Our results suggest that policymakers should expect a long run impact when using water prices to adjust the consumption behavior in Kuwait.
In this paper, we investigate the determinants of electricity demand in Kuwait and evaluate their impact on electricity consumption. In order to do this, we use the standard demand equation, cointegration techniques, and the error correction model on annual time series data for Kuwait from 1972 to 2017. One of the important features of our contribution is that it covers the most recently available data, in which we use the longest annual period (45 years) compared to all other studies of electricity demand in the region. We find that income elasticity for Kuwaiti consumers is insignificant both in short-run and the long run. This indicates that income has no impact on the consumption of electricity in Kuwait. Additionally, the short-run price elasticity is −0.22 while the long-run is −1.22, suggesting a negative yet elastic relationship between the electricity price in Kuwait and the demand in the long-run, while the short-run is inelastic.
The objective of this paper was to investigate the determinants of gasoline demand in Kuwait and to assess their impact on consumption. We used the Standard Demand Equation (SDE), the Cointegration Techniques, and the Error Correction Model (ECM) on annual time-series data for Kuwait from 1972 to 2018. We obtained a price elasticity of -0.341 in the long-run, while the short-run price elasticity was insignificant, indicating that changes in prices had minimal or no effect on gasoline consumption in Kuwait. This may be at least in part due to consumers shifting their consumption from a higher grade of gasoline to a less expensive grade when prices changed. We also found that the income elasticity is 0.175 in the short-run and 0.234 in the long-run, indicating that income will be more effective in changing consumption in the long-run. We conclude that reducing gasoline subsidies could result in substantial governmental savings, but this may have an inequitable impact on low-income Kuwaitis.
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