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Examining the Role of Population Age Structure upon Residential Electricity Demand: A Case from Korea

Author

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  • Jaehyeok Kim

    (Graduate School of Energy and Environment (KU-KIST Green School), Korea University, Innovation Building, 145 Anam-ro, Sungbuk-gu, Seoul 02841, Korea)

  • Minwoo Jang

    (Power Planning Department, Korea Power Exchange, 625 Bitgaram-ro, Naju City 58322, Jeollanam-do, Korea)

  • Donghyun Shin

    (Korea Energy Economics Institute, 405-11 Jongga-ro, Jung-gu, Ulsan 44543, Korea)

Abstract

In this article, we empirically investigate the impact of the population age structure on electricity demand. Our study is motivated by suggestions from existing literature that demographic factors can play an important role in energy demand. Using Korean regional level panel data for 2000 to 2016, we estimate the long-run elasticities through employing cointegration regression and the short-run marginal effects by developing a panel error correction model. It is worth investigating the Korean case, since Korea is aging faster than any other advanced economy, and at the same time is one of the heaviest energy users in the world. To our knowledge, this is the first study analyzing how the population age structure affects residential electricity demand, based on regional data in Korea. Our analysis presents the following results. First, an increase in the youth population raises the residential electricity demand in the short- and long-run. Second, an increase in the population of people aged 65 and over also increases this electricity demand in the short- and long-run. Third, among the group of people aged 65 and over, we further investigate the impact of an older population group, aged 80 and over, but separately, on their residential electricity demand. However, in general there is no strong relationship in the short- and long-run.

Suggested Citation

  • Jaehyeok Kim & Minwoo Jang & Donghyun Shin, 2019. "Examining the Role of Population Age Structure upon Residential Electricity Demand: A Case from Korea," Sustainability, MDPI, vol. 11(14), pages 1-19, July.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:14:p:3914-:d:249427
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