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Estimating Consumer Energy Demand Using International Data: Theoretical and Policy Implications

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  • Dale S. Rothman
  • J.Ho Hong
  • Timothy D. Mount

Abstract

In this paper, consumer energy demand is estimated as part of a complete demand system using a consistent set of international data on prices and expenditures for 53 countries ranging from the poorest to the wealthiest. We compare three models: the Translog, the Deaton-Muellbauer Almost Ideal Demand System (DM), and the Generalized Logit (Logit), and two levels of commodity aggregation (6-good and 9-good). The estimation results indicate that the model specification and level of aggregation are important. The Logit model performs better than the Translog and D-M models which provide illogical elasticity estimates for many countries. The 9-good model shows that the demand for electricity is significantly more price and income elastic than the demand for primary energy.

Suggested Citation

  • Dale S. Rothman & J.Ho Hong & Timothy D. Mount, 1994. "Estimating Consumer Energy Demand Using International Data: Theoretical and Policy Implications," The Energy Journal, , vol. 15(2), pages 67-88, April.
    • Handle: RePEc:sae:enejou:v:15:y:1994:i:2:p:67-88
    DOI: 10.5547/ISSN0195-6574-EJ-Vol15-No2-4
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    References listed on IDEAS

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    1. Dumagan, Jesus C. & Mount, Timothy D., 1993. "Welfare effects of improving end-use efficiency: Theory and application to residential electricity demand," Resource and Energy Economics, Elsevier, vol. 15(2), pages 175-201, June.
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