| ID | 128383 |
| Title Proper | Short- and long-run elasticities of electricity demand in the Korean service sector |
| Language | ENG |
| Author | Lim, Kyoung-Min ; Lim, Seul-Ye ; Yoo, Seung-Hoon |
| Publication | 2014. |
| Summary / Abstract (Note) | This paper attempts to examine the electricity demand function in the Korean service sector using the annual data covering the period 1970-2011. The short- and long-run elasticities of electricity demand with respect to price and income are empirically estimated using a co-integration and error-correction model. The short- and long-run price elasticities are estimated to be -0.421 and -1.002, respectively. The short- and long-run income elasticities are computed to be 0.855 and 1.090, respectively. Electricity demand in the service sector is inelastic to changes in both price and income in the short-run, but elastic in the long-run. Therefore, it appears that a pricing policy is more effective than the direct regulation of reducing electricity demand in the long-run in order to stabilize the electricity demand in the service sector. Moreover, it is necessary to encourage a more efficient use of electricity to cope with increasing demand for electricity following economic growth because the electricity demand in the service sector is income-elastic in the long-run. |
| `In' analytical Note | Energy Policy Vol.67; Apr 2014: p.517-521 |
| Journal Source | Energy Policy Vol.67; Apr 2014: p.517-521 |
| Key Words | Elasticity ; Electricity Demand in Service Sector ; Error - Correction Model |