The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis

18 Pages Posted: 8 May 2007 Last revised: 2 Nov 2014

See all articles by Enrica De Cian

Enrica De Cian

Fondazione Eni Enrico Mattei (FEEM); CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

Elisa Lanzi

Fondazione ENI Enrico Mattei (FEEM)

Roberto Roson

Ca Foscari University of Venice - Dipartimento di Economia; Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy; Loyola Andalucia University

Date Written: April 2007

Abstract

This paper presents an empirical study of energy demand, in which demand for a series of energy goods (Gas, Oil Products, Coal, Electricity) is expressed as a function of various factors, including temperature. Parameter values are estimated econometrically, using a dynamic panel data approach. Unlike previous studies in this field, the data sample has a global coverage, and special emphasis is given to the dynamic nature of demand, as well as to interactions between income levels and sensitivity to temperature variations. These features make the model results especially valuable in the analysis of climate change impacts. Results are interpreted in terms of derived demand for heating and cooling. Non-linearities and discontinuities emerge, making it necessary to distinguish between different countries, seasons, and energy sources. Short- and long-run temperature elasticities of demand are estimated.

Keywords: Energy Demand, Cooling Heating Effect, Temperature, Dynamic Panel

JEL Classification: C3, Q41, Q54

Suggested Citation

De Cian, Enrica and Lanzi, Elisa and Roson, Roberto, The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis (April 2007). FEEM Working Paper No. 46.2007; University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 04-2007. Available at SSRN: https://ssrn.com/abstract=984237 or http://dx.doi.org/10.2139/ssrn.984237

Enrica De Cian (Contact Author)

Fondazione Eni Enrico Mattei (FEEM) ( email )

Campo S. M. Formosa, Castello 5252
Venice, 30122
Italy

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici ( email )

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Elisa Lanzi

Fondazione ENI Enrico Mattei (FEEM) ( email )

Campo S. M. Formosa, Castello 5252
Venezia, 30122
Italy
+39 0412711470 (Phone)

HOME PAGE: http://www.feem.it

Roberto Roson

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy
+39 041 2349147 (Phone)
+39 041 2349176 (Fax)

HOME PAGE: http://venus.unive.it/roson

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

viale Filippetti, 9
Milan, 20122
Italy

Loyola Andalucia University ( email )

Escritor Castilla Aguayo no. 4
Cordoba, CORDOBA 14004
Spain

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