Fuel Demand Elasticities for Energy and Environmental Policies: Evidence from Household Data in Pakistan

Abstract

Energy can be considered as condition for both financial growth and a higher set of living. Due to increase in

demand of electricity Pakistan is facing many problems of energy. An incorporated plan is required to enhance the

efficiency of energy. This study has investigated the most thoughtful economic problem of this era. Today electricity

and gas have a great impact on economic life of any person. No one can deny the importance of these natural

resources. I have tried my best to find out the weaknesses in these two dimensions and want to highlight the lack of

interest of our government in the welfare of humans according to these resources. A middle income person always

used the low appliances in their household budget. But our elite class always uses a big part of these resources in

their luxuries and in hustle bustle of life. The analysis is based on the cross sectional data for about 16341

households covering the period 2010-2011. Ordinary Least Square and Tobit is used for electricity demand function

estimation. From this research I have concluded that prices play a significant role in these resources of demand, but

income shows insignificant effect.