Volume 8, Issue 30 (3-2018)                   jemr 2018, 8(30): 171-220 | Back to browse issues page

XML Persian Abstract Print

Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:

Shirani Fakhr Z. Estimating Price and Production Elasticities of Natural Gas in the Manufacture of Basic Metals Industries of Iran. jemr. 2018; 8 (30) :171-220
URL: http://jemr.khu.ac.ir/article-1-1377-en.html
Abstract:   (546 Views)
In this study, we estimate the demand for natural gas in the subsection manufacture of basic metals of Iran using structural time series model (STSM) over the period of time 1981-2013. Such model contains unobservable elements which have been transported to state space model with the use of kalman filter and is estimated by implementing maximum likelihood approach. Also, because the Targeting of Subsidies Plan was approved by the Iranian parliament at the end of 2010, so we evaluate the role of this plan on energy demand of industrial subsectors. Finding of the research is that, first of all the nature of the trend is smooth one. Secondly, it is changing on a nonlinear basis. The estimated demand function shows that price elasticity for natural gas in the long and short run, correspondingly, are (-0.30) and (-0.79) and production elasticities of natural gas in the short and long run, correspondingly, are (0.17) and (0.38). Furthermore, Cross elasticity for electricity and gasoline in the long and short run, correspondingly, are substitute and complementary goods. In addition, the result of evaluating effect of the Targeting of Subsidies Plan show that estimated natural gas demand functions can explain the impact of this policy.
Full-Text [PDF 657 kb]   (151 Downloads)    
Type of Study: Applicable | Subject: انرژی، منابع و محیط زیست
Received: 2017/02/27 | Accepted: 2017/12/20 | Published: 2018/03/6

1.  Adeyemi Olutomi I and Lester C Hunt. (2009), Accounting for asymmetric price responses and underlying energy demand trends in OECD industrial energy demand, Surrey Energy Economics centre (SEEC), Discussion paper Series.
2.  Amirmoeini M, Mohammadi T, Khorsandi M. Modeling Electricity Demand in the Industrial Sector in Iran: An Structural Time Series Model. jemr. 2015; 5 (18) :87-117
3.  Beenstock, M. and Willcocks, P. (1983). Energy and Economic Activity: A reply to Kouris, Energy Economics, No 5, p. 212.
4.  Box, G.P.E,. Jenkins, G.M., (1978). "Time Series Analysis: Forecasting and Control. San Francisco, Holden Day.
5.  Chitnis, Mona (2005), Estimating the price elasticity of gas demand using the structural time series model and the concept of Underlying trend, Quarterly journal of economic research, No 3, pp 1-16.
6.  Commandeur, Jacqes J.F., Siem Jan Koopman, (2007), An Introduction To State Space Time Series Analysis, Oxford University Press.
7.  Dehghani, Farid & Ibrahim Maghsoodi (2011), The Effect of Targeted Subsidies on Energy Industries, Research Center of the Majles, Office of Energy Studies, Industry and Mines, Mining and Mining Industries Group.
8.  Dilaver, Zafar (2012), Structural Times Series Modelling of Energy Demand, PhD Thesis, Surrey Energy Economics Centre (SEEC), School of Economics, Faculty of Business, Economics and Law, University of Surrey,Guildford ,UK.
9.  Harvey AC, Shephard N. (1993). Structural Time Series Models. In: Maddala GS, Rao CR and Vinod HD (Eds), Handbook of Statistics, Vol. 11 North Holland: Amsterdam; p 261-302.
10.  Hamilton, James D (1994), Time Series Analysis, Princeton University Press, Princeton, New Jersey.
11.  Harvey, A. C. (1989), Forecasting, Structural Time Series Models and the Kalman Filter, Cambridge University Press, Cambridge, UK.
12.  Harvey, A. C. (1997). "Trends, Cycles and Autoregressions", Economic Journal, No 107, pp 192-201 [DOI:10.1111/1468-0297.00152]
14.  Harvey, A.C., Henry, S.G.B., Peters, S., Wren-Lewis, S., (1986). "Stochastic trends in dynamic regression models: an application to the employment–output equation". Econ. Journal. No 96, pp 975–985. [DOI:10.2307/2233168]
16.  Hunt LC, Judge G and Ninomiya Y. (2000), "Modelling Technical Progress: An Application of the Stochastic Trend Model to UK Energy Demand". Surrey Energy Economics Discussion Paper, SEEDS99.
17.  Hunt, L. C., Judge, G., Ninomiya, Y. (2003a) "Underlying trends and seasonality in UK energy demand: A sectoral analysis". Energy Economics, Vol 25, No 1, pp 93-118.
18.  Hunt, L. C., Judge, G., Ninomiya, Y. (2003b). Modelling underlying demand trends. Chapter 9 in L. C. Hunt (Ed) Energy in a competitive market: Essays in honour of Colin Robinson, Edward Elgar, Cheltenham, UK.
19.  Hunt LC, Ninomiya Y, (2003), Underlying Trends and Seasonality: A structural Time Series Analysis of Transport Oil Demand in the UK and Japan. The Energy Journal; Vol 24, No 3,pp 63-69.
20.  Huntington, Hillard G. (2007). Industrial Natural Gas Consumption in the United States: An Empirical Model for Evaluating Future Trends, Energy Economics, No 29, pp 743–759.
21.  -Jones, C. T. (1994). Accounting for Technical Progress in Aggregate Energy Demand, Energy Economics, No 16, pp 245-252.
22.  Kani, Alireza, Majid Abbaspour & Zahra Abedi (2013); Estimation of Natural Gas Demand in Industry Sector of Iran: A Nonlinear Approach, International Journal of Economics and Finance, Vol 5, No 9: 148-155.
23.  Keshavarz Hadad, Ghlolamreza & Mohammad Mirbagheri Jam (2007), Ivestigating the demand function of natural gas (domestic and commercial) in Iran, Quarterly Journal of Economic Researches of Iran, No 32, pp 137-160.
24.  Kouris, G. (1983a). Fuel Consumption for Road Transport in the USA, Energy Economics, No 5, pp 89-99.
25.  Laitner, J.A., S. J. DeCanio, J. G. Coomey and A. H. Sanstand (2003). "Room for Improvement: Increasing The Value of Energy Modeling for Policy Analysis", Utilities Policy, No 11, pp. 87-94. [DOI:10.1016/S0957-1787(03)00020-1]
27.  Maddala, G. S. and Kim, I. M. (1998), Unit Roots, Cointegration and Time Series, Cambridge University Press.
28.  Mahsa Sateei (2005), Estimation of the demand function of electricity of industrial sector of Iran; Master's dissertation, Islamic Azad University of Khorasgan.
29.  Majlis Research Center (2006), A Transitional Review of the Challenges of Aluminum and Steel Industries and the Contributing Factors to Their Expenditures in Iran, Infrastructure Studies Office.
30.  Maleki Reza (1999), Investigating the causal relationship between energy consumption and economic growth in Iran; Thesis Master of Science, Shahid Beheshti University of Tehran.
31.  Marzban, Hossein, Reza Akbarian & Ali Ghasemi (2005), Investigation of Demand for Fuel Types and Their subsitution in Heat Plants of Power Generation (Ministry of Energy), Quarterly Journal of Economic Research, No 16, pp 51-73.
32.  Ministry of Energy (2011), Energy balance sheet 2011, Tehran: Deputy Director General for Electricity and Energy, Office of Planning for Electricity and Energy
33.  Ministry of Energy (2012), Energy balance sheet 2012, Tehran: Deputy Director General for Electricity and Energy, Office of Planning for Electricity and Energy
34. ♣ Pesaran, M.H. and Y. Shin. (1999) 'An autoregressive distributed lag-modeling approach to co integration analysis.' In: Strom, S.(Ed.), Econometrics and Economic Theory in the 20th Century : The Ragnar Frisch Centennial Symposium. Cambridge University Press, Cambridge. [DOI:10.1017/CCOL521633230.011] [PMID] [PMCID]
35.  Saghaeeiannejad, Seyyed Hossein & Mohammadreza Alipour Jedi (1998),The two-Stage Estimation of Energy Consumption Function in Iran industry; Based on Logic Model, Tahghighat Eghtesadi Journal, No 52, pp 43-92.
36.  Samadi, Saeed, Alimorad Sharifi, Aziz Ahmadzadeh & Azad Khanzadi (2009), Substitutability Between Energy and Capital in Basic Metals Manufacturing, Tahghighat Eghtesadi Journal, No 89, pp 129-155.
37.  Sharifi A, Azarbaijani K, Kazemi I, Shakeri A. Dynamic Energy Demand Analysis in the Iranian Manufacturing Industries. jemr. 2010; 1 (1) :77-107
38.  Shojaiee, Abdolnaser (2006), Estimation of Natural Gas Demand Function in the Industrial Sector of Iran; Master's Thesis, Isfahan University
39.  Soheili, Kiumars (2003), Comparative study of energy demand models, Quarterly Journal of Imam Sadiq University, No 17, pp 159-194.
40.  Statistical Center of Iran (1981-2011), The results of the survey of energy consumption of industrial workshops of 10 employees and more, Tehran.
41.  Statistical Center of Iran (1981-2011), Statistical Data of industrial workshops of 10 employees and more, Tehran
42.  -Welsch, H. (1989). The Reliability of Aggregate Demand Functions: An Application of Statistical Specification error Tests, Energy Economics, No 11, pp 285-292.

Add your comments about this article : Your username or Email:

Send email to the article author

© 2018 All Rights Reserved | Journal of Economic Modeling Research

Designed & Developed by : Yektaweb