Although a large body of research on the price elasticity of energy demand in Japan already exists, the elasticity estimates have wide range of results. Two problems most commonly noted in connection with estimating the price elasticity of energy demand concern the influence of non-linier energy demand trend and the asymmetry of price elasticity when prices rise and fall. Taking these two issues into account, we estimate the energy demand function for eight industrial sectors in Japan.
As for energy intensive sector, we found that the price elasticity in the period of price rise is higher than that of price fall. The estimated price elasticity is not very high, the lowest is -0.05 and the highest is -0.41. When we estimate time-varying price elasticity with single price variable without considering the asymmetry, the estimated price elasticity tends to change over time. However our results show that the asymmetric price elasticity is rather constant during the period even we use the time-varying parameter model. Therefore, the change of price elasticity is not reflecting the demand structural changes but is influenced by directions of price change.
抄録全体を表示