Estimation of the almost ideal demand system of Iran's electrical energy in the industrial sector
Subject Areas :
zeinab Mosavari nezam abad
1
,
Sayyed AbdolMajid Jalaee Esfandabadi
2
1 - Kerman Azad University
2 - Professor, Department of Economics, Shahid Bahonar University, Kerman, Iran.
Keywords: Iran, AIDS, Electrical Energy, Industrial Section, SUR,
Abstract :
AbstractThe power industry as one of the fundamental industries plays an important role in economic development and welfare of society. With respect to the importance of electrical energy in application of modern technology and environmental issues, this paper aimed at estimating the almost ideal demand of electrical energy of Iran in industrial section. To do so, the data were gathered during a period of time 1350 to 1390 and regression model SUR was employed to identify price, income, an cross elasticity concerning demand of electrical energy in industrial section. The results demonstrated that electrical energy is taken into account as an essential commodity in industrial section. On the other hand, other energies cannot substitute the electrical energy in industry. Interestingly, due to the low elasticity of electrical energy, the policy of price increasing cannot be a good solution for reduction of electrical energy. Therefore, policies in the electric energy sector must first be non-price and income-based, and secondly, they must be done with special care, so as not to cause structural changes in the consumption of this strategic commodity. Based on the obtained results, it is suggested that the energy policy in the industry should first be non-price and have an income, and secondly, it should be done carefully, which will cause a structural change in the consumption of this strategic commodity.
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