Estimating the elasticity of energy over consumption at micro level: a case study in Sabah, Malaysia

• Main Authors: Yii, Kwang-Jing, Caroline Geetha, Vivin Vincent Chandran
• Format: Article
• Language: English; English
• Published: Elsevier BV 2017
• Subjects: HB135-147 Mathematical economics. Quantitative methods Including econometrics, input-output analysis, game theory; HD9502-9502.5 Energy industries. Energy policy. Fuel trade
• Online Access: https://eprints.ums.edu.my/id/eprint/30574/1/Estimating%20the%20elasticity%20of%20energy%20over%20consumption%20at%20micro%20level_%20a%20case%20study%20in%20Sabah%2C%20Malaysia%20FULL%20TEXT.pdf; https://eprints.ums.edu.my/id/eprint/30574/2/Estimating%20the%20elasticity%20of%20energy%20over%20consumption%20at%20micro%20level_%20a%20case%20study%20in%20Sabah%2C%20Malaysia%20ABSTRACT.pdf; https://eprints.ums.edu.my/id/eprint/30574/; https://www.sciencedirect.com/science/article/pii/S1876610217309013#!; https://doi.org/10.1016/j.egypro.2017.03.824

This study aims to estimate the over consumption and essential elasticity for energy (petrol, diesel, electricity and LPG) at micro level using LA-AIDS model after the implementation of managed floating mechanism. The findings show that low income group possesses the highest cost of over consumption for electricity. Besides, the own price elasticity indicates that petrol and diesel are price elastic for low income group while households are not responsive towards price changes for electricity and LPG. Lastly, households treat both petrol and LPG as luxury goods while diesel and electricity are necessity goods for low income group based on the integrated expenditure elasticity. Thus, measures should be taken to develop the subsidy rationalization for electricity and LPG in the future.