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Engel curves, household characteristics and low-user tariff schemes in natural gas

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  • Navajas, Fernando H.

Abstract

We explore the relative importance of income and household characteristics (such as family size) in explaining differences in household consumption of natural gas and LPG. In a simple model of vertically (willingness to pay) ordered households we posit that the relative importance of the income elasticity of demand (vs. the family size elasticity) depends positively on the price faced by households. Thus, very low prices tend to depress the across households income elasticity of demand relative to the characteristic-elasticity and the opposite holds for under high prices. We test this hypothesis using, for the first time in Argentina, data from the household expenditure survey on Natural gas and LPG and compare the cross-consumption equations for both fuels, which have quite different price regimes. Finally, we explore welfare implications for low-user tariff scheme reforms in natural gas.

Suggested Citation

  • Navajas, Fernando H., 2009. "Engel curves, household characteristics and low-user tariff schemes in natural gas," Energy Economics, Elsevier, vol. 31(1), pages 162-168, January.
    • Handle: RePEc:eee:eneeco:v:31:y:2009:i:1:p:162-168
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    2. Navajas, Fernando & Porto, Alberto, 1990. "La tarifa en dos partes cuasi óptima. Eficiencia, equidad y financiamiento," El Trimestre Económico, Fondo de Cultura Económica, vol. 57(228), pages 863-887, octubre-d.
    3. Phlips,Louis, 1983. "The Economics of Price Discrimination," Cambridge Books, Cambridge University Press, number 9780521283946, September.
    4. Fernando H. Navajas, 2006. "Estructuras Tarifarias Bajo Stress," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(1-2), pages 77-102, January-D.
    5. Berkhout, Peter H. G. & Ferrer-i-Carbonell, Ada & Muskens, Jos C., 2004. "The ex post impact of an energy tax on household energy demand," Energy Economics, Elsevier, vol. 26(3), pages 297-317, May.
    6. Navajas, Fernando H., 2008. "Infrastructure integration and incomplete contracts: natural gas in the Southern Cone," MPRA Paper 31025, University Library of Munich, Germany.
    7. Fernando H. Navajas, 2006. "Estructuras Tarifarias Bajo Stress," Económica, Instituto de Investigaciones Económicas, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(1-2), pages 77-102, January-D.
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    Cited by:

    1. Ariel Casarin, 2014. "Regulated price reforms and unregulated substitutes: the case of residential piped gas in Argentina," Journal of Regulatory Economics, Springer, vol. 45(1), pages 34-56, February.
    2. Hasan, Syed Abul & Mozumder, Pallab, 2017. "Income and energy use in Bangladesh: A household level analysis," Energy Economics, Elsevier, vol. 65(C), pages 115-126.
    3. Navajas, Fernando H. & Panadeiros, Monica & Natale, Oscar, 2011. "Environmentally Related Energy Taxes in Argentina, Bolivia and Uruguay," MPRA Paper 37829, University Library of Munich, Germany.
    4. Mariana Marchionni & Walter Sosa-Escudero & Javier Alejo, 2008. "La Incidencia Distributiva del Acceso, Gasto y Consumo de los Servicios Públicos," CEDLAS, Working Papers 0067, CEDLAS, Universidad Nacional de La Plata.
    5. Arbues, Fernando & Villanu´a, Inmaculada & Barberán Ortí, Ramón, 2010. "Household size and residential water demand: an empirical approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 1-20.
    6. Hancevic, Pedro I. & Nuñez, Hector M. & Rosellon, Juan, 2017. "Distributed photovoltaic power generation: Possibilities, benefits, and challenges for a widespread application in the Mexican residential sector," Energy Policy, Elsevier, vol. 110(C), pages 478-489.
    7. Arturo Vásquez & Raúl García & Edwin Quintanilla & Julio Salvador & David Orosco, 2012. "Acceso a la Energía en el Perú : Algunas Opciones de Política," Working Papers 29, Osinergmin, Gerencia de Políticas y Análisis Económico.
    8. Hancevic, Pedro & Cont, Walter & Navajas, Fernando, 2016. "Energy populism and household welfare," Energy Economics, Elsevier, vol. 56(C), pages 464-474.
    9. Curtis, John & Pentecost, Anne, 2015. "Household fuel expenditure and residential building energy efficiency ratings in Ireland," Energy Policy, Elsevier, vol. 76(C), pages 57-65.
    10. Copiello, Sergio & Grillenzoni, Carlo, 2017. "Is the cold the only reason why we heat our homes? Empirical evidence from spatial series data," Applied Energy, Elsevier, vol. 193(C), pages 491-506.
    11. Diego Barril and Fernando Navajas, 2015. "Natural Gas Supply Behavior under Interventionism: The Case of Argentina," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    12. Fernando Arbués & Inmaculada Villanúa & Ramón Barberán, 2010. "Household size and residential water demand: an empirical approach ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 61-80, January.
    13. International Monetary Fund, 2010. "Islamic Republic of Iran: Selected Issues Paper," IMF Staff Country Reports 2010/076, International Monetary Fund.

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