Next Article in Journal
Modeling Woody Biomass Procurement for Bioenergy Production at the Atikokan Generating Station in Northwestern Ontario, Canada
Previous Article in Journal
Degradation Characteristics of Wood Using Supercritical Alcohols
Open AccessArticle

Short-Run and Long-Run Elasticities of Diesel Demand in Korea

Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 139-743, Korea
Department of Energy IT, Gachon University, Bokjeong-dong, Sujeong-gu, Seongnam-si, Gyeonggi-do 461-701, Korea
Author to whom correspondence should be addressed.
Energies 2012, 5(12), 5055-5064;
Received: 10 August 2012 / Revised: 15 October 2012 / Accepted: 13 November 2012 / Published: 28 November 2012
This paper investigates the demand function for diesel in Korea covering the period 1986–2011. The short-run and long-run elasticities of diesel demand with respect to price and income are empirically examined using a co-integration and error-correction model. The short-run and long-run price elasticities are estimated to be −0.357 and −0.547, respectively. The short-run and long-run income elasticities are computed to be 1.589 and 1.478, respectively. Thus, diesel demand is relatively inelastic to price change and elastic to income change in both the short-run and long-run. Therefore, a demand-side management through raising the price of diesel will be ineffective and tightening the regulation of using diesel more efficiently appears to be more effective in Korea. The demand for diesel is expected to continuously increase as the economy grows. View Full-Text
Keywords: elasticity; diesel demand; Korea; co-integration; error-correction model elasticity; diesel demand; Korea; co-integration; error-correction model
Show Figures

Figure 1

MDPI and ACS Style

Lim, K.-M.; Kim, M.; Kim, C.S.; Yoo, S.-H. Short-Run and Long-Run Elasticities of Diesel Demand in Korea. Energies 2012, 5, 5055-5064.

Show more citation formats Show less citations formats

Article Access Map by Country/Region

Only visits after 24 November 2015 are recorded.
Back to TopTop