• Focus Area -
  • Type KAPSARC journal article
  • Date 1 April 2018


The purpose of this paper is to empirically estimate a model of aggregate residential and commercial energy demand elasticities, taking into account capital stock and climatic effects. We model a theoretically founded non-linear energy demand system, the generalized almost ideal, for the most important 117 countries in the world, which represent around 95% of the world population and 97% of the primary residential energy consumption, for the period 1978–2012. To this end, we assume a multi-stage utility maximization process, which models energy demand within a comprehensive theoretical framework. This paper offers three new contributions to research. First, we model energy aggregate demand response with a flexible and theoretically plausible simultaneous system. Second, we empirically measure the complete structure of price and expenditure elasticities of energy demand worldwide. Third, we explicitly estimate the impact of climate conditions on energy demand, with a newly constructed measure of weather impact based on geo-located heating and cooling degree-days. Econometric estimation reveals quantitative evidence of different income and price elasticities across countries and highlights the weather and capital stock impact on energy demand, inducing energy efficiency. Electricity tends to be a luxury good in advanced economies. Our results have welfare-improving policy implications, because appropriate policy strategies can help public decision-makers promote production efficiency and consumer welfare. © 2017, Springer International Publishing AG.


Economia Politica


Tarek Atalla

Tarek Atalla

Former Research Associate

Simona Bigerna

Simona Bigerna

Associate Professor of Economics, University of Perugia

Carlo Andrea Bollino

Visiting Researcher Carlo Andrea Bollino is a Professor of Economics at the University of Perugia and Professor of Energy Economics at the… Carlo Andrea Bollino is a Professor of Economics at the University of Perugia and Professor of Energy Economics at the University LUISS, Rome. He holds a Ph.D. in Economics from the University of Pennsylvania, where he was supervised by Nobel laureate Professor Lawrence Klein. He has been a Visiting Researcher at KAPSARC since 2015, focusing on econometric analysis, electricity market reform and climate change policy analysis. He is a Visiting Professor at Technische Universität, Berlin, Germany, the President (honorary) of the Italian Association for Energy Economics. He was the President of the IAEE in 2008, the President of GSE (Italian Renewable Energy Agency) and GRTN (Italian Electric Transmission network); Energy Advisor to the Minister of Industry and Ministry of Treasury of Italy; Chief Economist, ENI; Economist, Bank of Italy; and a Research Associate at Project Link for the United Nations. He has testified to the Italian Senate and Parliament briefings and has provided various governments with technical and policy reports on electricity market liberalization and renewable energy developments.


  • Consumer Behavior
  • Investment
  • Energy and Environment
  • Macroeoconometric Modeling

Publications See all Carlo Andrea Bollino’s publications

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