Estimation of city gas demand function using time series data

Abstract

-This paper attempts to estimate the city gas demand function in Korea over the period 1981-2012. As the city gas demand function provides us information on the pattern of consumer's city gas consumption, it can be usefully utilized in predicting the impact of policy variables such as city gas price and forecasting the demand for city gas. We apply lagged dependent variable model and ordinary least square method as a robust approach to estimating the parameters of the city gas demand function. The results show that short-run price and income elasticities of the city gas demand are estimated to be -0.522 and 0.874, respectively. They are statistically significant at the 1% level. The short-run price and income elasticities portray that demand for city gas is price-and income-inelastic. This implies that the city gas is indispensable goods to human-being's life, thus the city gas demand would not be promptly adjusted to responding to price and/or income change. However, long-run price and income elasticities reveal that the demand for city gas is price-and income-elastic in the long-run.

Biomass to Electricity: The Case of South Korea

“…And of the 5.9 trillion kWh of new renewable electricity that will be added to world supply over 2012-2040, biomass-and waste-based electricity generation will contribute close to 856 billion kWh (i.e., 14% of the total). 16 Focusing on South Korea, the introduction of the RPS system in 2012 has boosted interest in using biomass and wood pellets for energy generation. Wood pellets in particular are primarily used with coal in South Korea in co-firing applications, and their growing demand is met by imports coming mainly from Canada, Southeast Asia, and the United States.…”

The Potential Implications of the Introduction of Bioelectricity in South Korea

“…Other authors look at the Korean natural gas market. For instance, Lee et al [17] estimate-using ordinary least squares with lagged dependent variable-the city gas demand function for South Korea during the period 1981-2012. Its short-run own-price and income elasticities are estimated to be −0.522 and 0.874, respectively, implying that the demand for city gas is own-price and income inelastic in the short run.…”