A Meta-Analysis on the Price Elasticity of Energy Demand

46 Pages Posted: 23 Apr 2016

See all articles by Xavier Labandeira

Xavier Labandeira

University of Vigo - Faculty of Economics and Business

J. Maria Labeaga Azcona

Universidad Nacional de Educacion a Distancia (UNED) - Faculty of Economics

Xiral López-Otero

University of Vigo - Faculty of Economics and Business

Date Written: April 2016

Abstract

Price elasticities of energy demand have become increasingly relevant in estimating the socio-economic 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.

Keywords: Short-term, long-term, electricity, gas, gasoline, diesel, oil.

JEL Classification: C13, C83, Q41

Suggested Citation

Labandeira, Xavier and Labeaga Azcona, José Maria and López-Otero, Xiral, A Meta-Analysis on the Price Elasticity of Energy Demand (April 2016). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2016/25, Available at SSRN: https://ssrn.com/abstract=2768161 or http://dx.doi.org/10.2139/ssrn.2768161

Xavier Labandeira (Contact Author)

University of Vigo - Faculty of Economics and Business ( email )

As Lagoas Marcosende s/n
Vigo, Galiza E36310
Spain

José Maria Labeaga Azcona

Universidad Nacional de Educacion a Distancia (UNED) - Faculty of Economics ( email )

Calle Senda del Rey, 11
28040 Madrid
Spain
+34 91 398 7811 (Phone)
+34 91 398 6339 (Fax)

Xiral López-Otero

University of Vigo - Faculty of Economics and Business ( email )

As Lagoas Marcosende s/n
Vigo, Galiza 36310
Spain

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