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The Demand for Natural Gas: A Survey of Price and Income Elasticities

My purpose has been to survey and review price and income elas-ticities of the demand for natural gas. The surveyed studies are classified by demand type, where the functional forms, estimation techniques, data types, estimated periods and concerned countries or regions are indicated. Studies have demonstrated that there is variation in price and income elasticity estimates. These discrepancies are due to differing estimated periods, various data sources, structural changes, geographical differentials, and the distinction between different demand types. In the short run, it appears that industrial demand and residential-commercial demand are inelastic with respect to price and income. Industrial demand is more responsive to income than residential-comercial demand in the short run as well as in the long run. This might be caused by the differences between natural gas end uses.

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Energy Specializations: Energy Modeling – Energy Data, Modeling, and Policy Analysis; Natural Gas – Markets and Prices

JEL Codes:
E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
L13 - Oligopoly and Other Imperfect Markets

Keywords: Natural Gas demand, Price and income elasticities, Residential gas demand, Industrial gas demand

DOI: 10.5547/ISSN0195-6574-EJ-Vol10-No1-7

Published in Volume 10, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.