The Elasticity of Natural Gas Demand in Selected Countries

In this study, the estimation of price, income and cross elasticities of gas demand in the selected group of high income and middle -income countries in the period of 1990-2020 has been done using the panel data method. The results of the estimation of the model using the fixed effects method showed that gas is an inelastic commodity in the group of selected countries. The price elasticity of natural gas in the group of selected high income and middle-income countries is 0.256077 and 0.196553 respectively. The reaction of gas consumers in the group of selected high-income countries is higher than the group of selected middle-income countries to the same change in the price of gas and also, the results of income elasticity showed that gas is an essential commodity in the group of selected countries. The income elasticity of gas in the group of selected high-income and middle-income countries is 0.355611 and 0.490959, respectively, and finally, the results of cross-elasticity estimation showed that electricity is a substitute for gas in the group of selected countries. The cross-elasticity of gas compared to the price of electricity in the group of selected high-income and middle-income countries is 0.029562 and 0.091683, respectively. The reaction of gas consumers in the group of selected middle-income countries to the same change in income and price of electricity is more than that of the group of selected high-income countries.