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A meta-analysis on the price elasticity of energy demand
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1028-3625
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EUI RSCAS; 2016/25; Florence School of Regulation; Climate
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LABANDEIRA, Xavier, LABEAGA, Jose Maria, LÓPEZ-OTERO, Xiral, A meta-analysis on the price elasticity of energy demand, EUI RSCAS, 2016/25, Florence School of Regulation, Climate - https://hdl.handle.net/1814/40870
Abstract
Price elasticities of energy demand have become increasingly relevant in estimating the socio-economic and environmental effects of energy policies or of other events with influence on the prices of energy goods. Since the 1970s a large number of academic papers have provided both short and long-term price elasticity estimates for different countries by using several models, data and estimation techniques. Yet the literature offers a rather wide range of estimates for the price elasticities of demand for energy. This paper quantitatively summarizes the recent, but still sizeable, empirical evidence on this matter to facilitate a sounder economic assessment of energy price changes. It does so by using meta-analysis to identify the main factors affecting the elasticity results, both short and long term, for energy in general as well as for specific products: electricity, natural gas, gasoline, diesel and heating oil.