Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7402550 | Energy Policy | 2014 | 5 Pages |
Abstract
This paper attempts to examine the electricity demand function in the Korean service sector using the annual data covering the period 1970-2011. The short- and long-run elasticities of electricity demand with respect to price and income are empirically estimated using a co-integration and error-correction model. The short- and long-run price elasticities are estimated to be â0.421 and â1.002, respectively. The short- and long-run income elasticities are computed to be 0.855 and 1.090, respectively. Electricity demand in the service sector is inelastic to changes in both price and income in the short-run, but elastic in the long-run. Therefore, it appears that a pricing policy is more effective than the direct regulation of reducing electricity demand in the long-run in order to stabilize the electricity demand in the service sector. Moreover, it is necessary to encourage a more efficient use of electricity to cope with increasing demand for electricity following economic growth because the electricity demand in the service sector is income-elastic in the long-run.
Keywords
Related Topics
Physical Sciences and Engineering
Energy
Energy Engineering and Power Technology
Authors
Kyoung-Min Lim, Seul-Ye Lim, Seung-Hoon Yoo,