Template-Type: ReDIF-Article 1.0
Author-Name:  Jing Cao, Mun S. Ho, and Huifang Liang
Title:  Household energy demand in Urban China: Accounting for regional prices and rapid income change
Classification-JEL: F0
Volume:  Volume 37
Issue:  China Special Issue
Year:  2016
Abstract:  Understanding the rapidly rising demand for energy in China is essential to efforts to reduce the country's energy use and environmental damage. In response to rising incomes and changing prices and demographics, household use of various fuels, electricity and gasoline has changed dramatically in China. In this paper, we estimate both income and price elasticities for various energy types using Chinese urban household micro-data collected by National bureau of Statistics, by applying a two-stage budgeting AIDS model. We find that total energy is price and income inelastic for all income groups after accounting for demographic and regional effects. Our estimated electricity price elasticity ranges from - 0.49 to -0.57, gas price elasticity ranges from -0.46 to -0.94, and gasoline price elasticity ranges from -0.85 to -0.94. Income elasticity for various energy types range from 0.57 to 0.94. Demand for coal is most price and income elastic among the poor, whereas gasoline demand is elastic for the rich. 
Handle: RePEc:aen:journl:ej37-si1-Cao
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=2704
File-Format: text/html
File-Restriction: Access to full text is restricted to IAEE members and subscribers.