Work detail

Price elasticity of natural gas demand in the Czech Republic

Author: Mgr. František Kolátor
Year: 2004 - winter
Leaders: † prof. Ing. Michal Mejstřík CSc.
Consultants:
Work type: Finance and Banking
Masters
Language: English
Pages: 87
Awards and prizes:
Link:
Abstract: The main objective of this paper is to examine natural gas demand in the Czech Republic throughout 1996-2003 and try to estimate its price elasticity. First part of the paper deals with theoretical framework that provides background for both demand analysis and price elasticity estimation. Following section briefly describes natural gas market in the Czech Republic in terms of institutional framework, market segmentation and structure of natural gas consumption. Third part identifies and defines all variables that shall be used in gas demand analysis. After description of variables derivation of models for three main customer groups follows. Next part of the paper deals with the estimation of natural gas demand equations for several customer groups. There are two main approaches that were chosen to do so, namely a fixed effects approach and a constant coefficients approach. In the last but not the least part of the paper, price, cross-price and costs elasticities are calculated. This calculation is based on estimated demand equations from previous section.

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