Next Article in Journal
Reading Habits, Socioeconomic Conditions, Occupational Aspiration and Academic Achievement in Vietnamese Junior High School Students
Next Article in Special Issue
Long-Term Electricity Supply and Demand Forecast (2018–2040): A LEAP Model Application towards a Sustainable Power Generation System in Ecuador
Previous Article in Journal
Ambidexterity in External Knowledge Search Strategies and Innovation Performance: Mediating Role of Balanced Innovation and Moderating Role of Absorptive Capacity
Previous Article in Special Issue
Scientific Decision Framework for Evaluation of Renewable Energy Sources under Q-Rung Orthopair Fuzzy Set with Partially Known Weight Information
Open AccessFeature PaperArticle

Demand Function for Industrial Electricity: Evidence from South Korean Manufacturing Sector

Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Korea
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(18), 5112; https://doi.org/10.3390/su11185112
Received: 18 June 2019 / Revised: 30 August 2019 / Accepted: 6 September 2019 / Published: 18 September 2019
(This article belongs to the Special Issue Sustainable Energy Economics and Policy)
Electricity is a crucial input to the industrial production of South Korea. Estimating the demand function for electricity in the manufacturing sector is an important task because electricity consumption in the manufacturing sector accounts for 56.3% of total electricity consumption in South Korea. Thus, this article tries to estimate the demand function for industrial electricity in the manufacturing sector of South Korea using cross-sectional data for analyzing the influence of manufacturing firms’ characteristics. To this end, 946 observations collected from a nationwide survey of manufacturing firms in 2018 are used and analyzed. As a robust approach, the least absolute deviations estimation method is applied to obtaining the demand function. The results show that the price elasticity and the sales amount elasticity of the industrial electricity demand are estimated to be −0.9206 and 0.2568, respectively, which are statistically significant at the 1% level. Furthermore, the economic benefits of industrial electricity consumption are computed to be 1.46 times as great as the price of electricity. The results of this study can be utilized in policy planning, making, and evaluation. View Full-Text
Keywords: industrial electricity; demand function; price elasticity; least absolute deviations; economic benefits industrial electricity; demand function; price elasticity; least absolute deviations; economic benefits
MDPI and ACS Style

Kim, H.-J.; Kim, G.-S.; Yoo, S.-H. Demand Function for Industrial Electricity: Evidence from South Korean Manufacturing Sector. Sustainability 2019, 11, 5112.

Show more citation formats Show less citations formats
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Back to TopTop