Price–ElasticityofEnergyDemandABibliography.docVIP

Price-Elasticity of Energy Demand A Bibliography By Gar W. Lipow This bibliography is a small sample of the thousands of papers written on energy elasticity and elasticity theory in general. Much of it is drawn from an extensive bibliography being prepared by Carol Dahl, Professor/Director, Petroleum Economics Management, Colorado School of Mines. From this material I have drawn one technical and two broader conclusions. Technically, any elasticity value is both imprecise and uncertain. To begin with elasticities vary — across economic sector, fuels, type of economy, and time. Small homogenous samples cannot perfectly represent the larger population and sometimes lead to impossible results (such as getting the sign wrong). Heterogeneity tends to creep into large samples, and aggregating heterogeneous data tends to bias elasticity estimates upward, due to demand changes in response to factors correlated with, but not related to, price changes. These include income, capital stocks, and demand for the goods and services the energy was consumed to provide. (According to the extensive literature on aggregation bias, that is a problem for demand functions in general, and production functions as well, to some extent.) Individual studies tend to have either broad confidence intervals or low confidence levels, or both. Too often, literature reviews and meta-analysis give confidence intervals that are too broad to be useful, like -0.15 to -0.8. While discarding outliers can help narrow confidence intervals, even those results are often frustratingly imprecise. There is no consensus among economists as to mathematical models that can compensate for these data limitations. Nevertheless, some literature reviews and meta-analyses that have compared competing methodologies have found similar results across multiple data sets. That is, methods A and B may produce different results against data set Q, but similar results when applied to data sets Q-Z. However not all meta-analyses f