Estimating the Demand for Diesel in Agriculture Sector of Iran


Abstract views: 152 / PDF downloads: 259

Authors

  • Lotfali Agheli Economic Research Institute, Tarbiat Modares University

Abstract

This paper estimates per capita demand for diesel by agricultural sector in Iran using Auto-Regressive Distributed Lags (ARDL) method over 1973-2012. The findings indicate that the demand for diesel is relatively inelastic in response to changes in its price, electricity acts as substitute input for diesel, diesel is a necessary input in agriculture, and mechanization index, despite having expected positive sign, fails to explain variations in diesel use. In addition, there is a long-run relationship among variables. According to Error Correction Model, the speed of adjustment in short-run distortions towards long-run equilibrium is moderate. The findings show that government policy on cutting energy subsidies is not enough for reducing diesel consumption in Iranian agricultural sector. Thus, non-price measures such as innovations in inter-fuel substitution technologies and applying efficient machineries are recommended to manage energy uses in agriculture.Keywords: Demand; Price; Diesel; Electricity; ARDLJEL Classifications: C51; Q16; Q41

Downloads

Download data is not yet available.

Author Biography

Lotfali Agheli, Economic Research Institute, Tarbiat Modares University

Assistant Professor of Economics

Downloads

Published

2015-07-13

How to Cite

Agheli, L. (2015). Estimating the Demand for Diesel in Agriculture Sector of Iran. International Journal of Energy Economics and Policy, 5(3), 660–667. Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/1219

Issue

Vol. 5 No. 3 (2015)

Section

Articles

License

Submission of an article implies that the work described has not been published previously , that it is not under consideration for publication elsewhere, that its publication is approved by all authors and tacitly or explicitly by the responsible authorities where the work was carried out, and that, if accepted, will not be published elsewhere in the same form, without the written consent of the Publisher. The Editors reserve the right to edit or otherwise alter all contributions, but authors will receive proofs for approval before publication.