Residential demand for fuels in New England: heating oil and natural gas

Journal Article · · N.Engl. J. Bus. Econ.; (United States)

OSTI ID:6604096

Briden, G; Reney, L J

This paper presents the results of attempts to estimate the residential demands for heating oil and natural gas in New England. In the case of heating oil, reasonably good results were obtained. The model employed appears to be appropriately specified, and the estimates are both statistically sound and intuitively reasonable. Of particular interest is the apparent increase in the price, cross-price, and income elasticities over the decade of the 1970's. Such is the expected consequence of the increases in the relative price of all energy sources during that period. It must be noted, however, that the forecasting capability of oil demand models based on data for the entire decade should be viewed tentatively. Results indicate that these models do not accurately reflect the interfuel substitution possibilities between natural gas and heating oil. Moreover, it is clear that New England consumers are now more sensitive to changes in the relative prices of fuels than they have been in the past. Results for the natural gas models are not as appealing as those obtained for heating oil. There is considerable evidence here of misspecification, and there is every indication that the data should not have been pooled. Consequently, it would appear that further work will be needed to generate reliable estimates of the elasticities of demand for this fuel.

• Research Organization: Univ. of Rhode Island, Kingston
• OSTI ID: 6604096
• Journal Information: N.Engl. J. Bus. Econ.; (United States), Journal Name: N.Engl. J. Bus. Econ.; (United States) Vol. 10:1; ISSN NEJEE
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700 -- Petroleum-- Economics
Industrial
& Business Aspects
03 NATURAL GAS
030600 -- Natural Gas-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
292000* -- Energy Planning & Policy-- Supply
Demand & Forecasting
294000 -- Energy Planning & Policy-- Fossil Fuels
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320101 -- Energy Conservation
Consumption
& Utilization-- Residential Buildings-- (-1987)
DEMAND
DEMAND FACTORS
ENERGY DEMAND
ENERGY SOURCES
FEDERAL REGION I
FLUIDS
FOSSIL FUELS
FUEL GAS
FUEL OILS
FUELS
GAS FUELS
GASES
HEATING OILS
LIQUID FUELS
NATURAL GAS
NORTH AMERICA
OILS
ORGANIC COMPOUNDS
OTHER ORGANIC COMPOUNDS
PETROLEUM PRODUCTS
RESIDENTIAL SECTOR
USA