In this paper, we revisit the theoretical framework for energy demand. We then use this theoretical framework to empirically model the Saudi Arabian industrial electricity demand. We show, in the case of Saudi Arabian data, that imposing parsimonious energy demand specification on data without testing relevant assumptions can lead to biased estimations and noticeably poor approximations, while imposing general energy demand specification without accounting for the data properties can lead to redundant estimations and lower approximation than what could be obtained otherwise. Combining the theory with the data can provide unbiased and irredundant estimations with high levels of approximations. Hence, this paper recommends, based on the empirical findings, that a better strategy would be the combination of theoretical coherence with data coherence in the General to Specific Modeling (GtSM) framework for the empirical analyses of energy demand.
Research Fellow Fakhri is a research fellow leading the KAPSARC Global Energy Macroeconometric Model (KGEMM) project. Previously, he was an associate professor… Fakhri is a research fellow leading the KAPSARC Global Energy Macroeconometric Model (KGEMM) project. Previously, he was an associate professor and director of the Center for Socio-Economic Research at Qafqaz University, Azerbaijan. He has served as a deputy director of the Research Institute at the Ministry of Economic Development, and a senior economist at the Research Department of the Central Bank of Azerbaijan Republic. He received a Fulbright Post-Doctoral Scholarship and conducted a research on building and applying a macroeconometric model for policy analysis at the George Washington University. Fakhri is a member of the research program on forecasting at the George Washington University and the editorial board of the Asian Journal of Business and Management Sciences. His research interests and experience span econometric modeling and forecasting, building and applying macroeconometric models for policy purposes, energy economics with a particular focus on natural resource-rich countries.
- Applied macroeconometrics
- Energy economics
- Time series modeling and forecasting
Publications See all Fakhri Hasanov’s publications
Your Mileage May Vary: Have Road-fuel Demand Elasticities Changed Over Time in Middle-income Countries?
In this paper, we revisit the theoretical framework for energy demand. We then use this…2nd October 2022
Cost, Emission, and Macroeconomic Implications of Diesel Displacement in the Saudi Agricultural Sector: Options and Policy Insights
In this paper, we revisit the theoretical framework for energy demand. We then use this…11th September 2022