Price Elasticity of Nonresidential Demand for Energy in South Eastern Europe

Iimi, Atsushi

World Bank, Washington, DC

关键词: ADMINISTERED PRICE;    ADVERSE EFFECT;    AGGREGATE LEVEL;    APPROACH;    AVAILABILITY;   

DOI  :  10.1596/1813-9450-5167
RP-ID  :  WPS5167

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Recent volatility in internationalenergy prices has revealed South Eastern Europe as one ofthe most vulnerable regions to such external shocks. Underthe current global economic downturn, in addition, theregion s energy-intensive industries are faced with thechallenge of the weakening demand for their outputs. Thispaper casts light on the relationship between the price andthe demand for energy. Based on firm level data, it is shownthat the price elasticity of industrial energy demand isabout -0.4 on average. There are a number of data issues tointerpret the results correctly. But Albania and Macedoniaare systematically found to have a relatively elastic demandfor energy on the order of -0.7 to -0.8. In these countries,therefore, price adjustments would be one of the effectivepolicy options to balance demand with supply during theperiod of energy crisis. In other countries, the demandresponse would be much weaker; pricing cannot be the onlysolution. Other policy measures, such as facilitation offirm energy efficiency and improvements in the quality ofinfrastructure services, may be required.