Liberalisation, consumption heterogeneity and the dynamics of energy prices

• Type: Article in International Scientific Journal
• Date: 2004

Authors

Paula Ferreira (Author) Other; Maria Isabel Soares (Author) FEP; Maria Madalena Teixeira de Araújo (Author) Other

Journal

Title: Energy Policy

Vol. 33 No. 17

Pages: 2244-2255

ISSN: 0301-4215

Publisher: Elsevier

Indexing

ISI Web of Knowledge - 8 Citations

Scopus - 12 Citations

Econlit

COMPENDEX

Scientific classification

FOS: Social sciences > Economics and Business

CORDIS: Social sciences > Economics

Other information

DOI: 10.1016/j.enpol.2004.05.003

Abstract (EN): In this study, the methodology VAR and the cointegration analysis are used to examine the dynamic interaction among the energy prices of the competitor energy sources in a liberalised market. Data from the UK market were applied, and models for the residential and industrial sectors were developed. Our results indicate the existence of long-run relationships between the energy prices before and after the liberalisation, implying the possibility of substitution among the different forms of energy. However, the results appear to be also largely influenced by external variables not included in the models that may be reducing the importance of the energy prices over their own evolution and offsetting the basic substitution relationships. The general results of the Impulse Response Functions, both for the residential and industrial sectors, present low statistical significance, which seems to be due to the still slow rate of adjustment of the energy market to price changes, along with the immaturity of the liberalisation process. Taking into consideration the results, some routes for future research are pointed out, namely the need to include in the analysis variables which would proxy the general state of the economy.

Language: Portuguese

Type (Professor's evaluation): Scientific