Short-run residential demand for natural gas

Journal Article · Fri Jan 01 04:00:00 EST 1982 · Energy J.; (United States)

DOI:https://doi.org/10.5547/ISSN0195-6574-EJ-Vol3-No1-3· OSTI ID:5512900

Barnes, R ^[1]; Gillingham, R; Hagemann, R

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1. Urban Inst., Washington, DC

The short-run demand for natural gas is analyzed. Combining price schedule information obtained from the American Gas Association with household-specific data from the 1972 to 1973 Consumer Expenditure Survey, the authors were able to determine the household's level of natural gas consumption and relate it to the household's level of natural gas consumption and relate it to household's shock of gas appliances and demographic profile. The demand function, in which the rate of utilization of each appliance was allowed to vary, was estimated using an instrumental variable technique that explicitly accounted for the negative correlation between the actual marginal gas price faced by the household and the stochastic component of natural gas demand. Overall short-run price elasticity, 0.682, supports existing evidence that short-run residential demand for natural gas is price inelastic. It differs significantly, however, in that it suggests a larger price responsiveness than that obtained in recent empirical investigations. In addition, our analysis highlights the significant variation across end-use categories, suggesting that the overall response is made up of a complex set of responses. 12 references, 3 tables.

• OSTI ID: 5512900
• Journal Information: Energy J.; (United States), Journal Name: Energy J.; (United States) Vol. 3:1; ISSN ENJOD
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
030600 -- Natural Gas-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
294003* -- Energy Planning & Policy-- Natural Gas
CONSUMPTION RATES
DEMAND FACTORS
ECONOMIC ELASTICITY
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
HOUSEHOLDS
NATURAL GAS
RESIDENTIAL SECTOR