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Interstate Differences In Price And Income Elasticities: The Case Of Natural Gas

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  • Yu Hsing

    (Southeastern Louisiana University)

Abstract

Based on a generalized functional form, this study tests potential spatial differences in the price and income elasticities of demand for natural gas. Empirical results show that the double-log and linear forms can be rejected at the 1 percent or 10 percent level and that price and income elasticities vary significantly with the price of natural gas and income, respectively. Specifically, price elasticities varied from -0.29 for Alaska to -2.24 for Florida, and income elasticities ranged from 0.37 for Alaska to 1.44 for Florida. Since separate elasticities can be estimated for individual states, in empirical work we need not choose a priori the double-log form by assuming a constant elasticity across states.

Suggested Citation

  • Yu Hsing, 1992. "Interstate Differences In Price And Income Elasticities: The Case Of Natural Gas," The Review of Regional Studies, Southern Regional Science Association, vol. 22(3), pages 251-259, Winter.
    • Handle: RePEc:rre:publsh:v22:y:1992:i:3:p:251-259
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    References listed on IDEAS

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    1. Gail R. Blattenberger, & Lester D. Taylor, & Robert K. Retinhack, 1983. "Natural Gas Availability and the Residential Demand for Energy," The Energy Journal, , vol. 4(1), pages 23-45, January.
    2. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
    3. Rudy Fichtenbaum & John P. Blair, 1989. "Regional Differences in Labor Demand in The United States," The Review of Regional Studies, Southern Regional Science Association, vol. 19(1), pages 72-76, Winter.
    4. Roberta Barnes & Robert Gillingham & Robert Hagemann, 1982. "The Short-Run Residential Demand for Natural Gas," The Energy Journal, , vol. 3(1), pages 59-72, January.
    5. Gemmill, Gordon, 1980. "Using the Box-Cox Form for Estimating Demand: A Comment," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 147-148, February.
    6. Hsing, Yu, 1990. "A note on functional forms and the urban size distribution," Journal of Urban Economics, Elsevier, vol. 27(1), pages 73-79, January.
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    3. 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.

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