Planning and Budgeting

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Energy carriers including electricity play a critical role in human societies development, and as the time passes, their importance in the human socio-economic life rises. Therefore, knowing electricity demand and the factors affecting on it could have an effective role in economic decision-making. While dividing electricity demand into different consuming sectors, this study uses economic variables based on microeconomic theoretical fundamentals in order to estimate elecricity demand and explaining short and long-run price and income elasticities in each sector. For this purpose, time series data have been utilized and an estimation technique was made by the Ordinary Least Squares (OLS) and Error Correction Model (ECM). Meanwhile, surveying each of the time series according to Augmented Dickey-Fuller (ADF) test, Perron test and cointegration tests through Engle-Granger and Engle-Yoo methods revealed that there is a long – run cointegration within the demand model variables. Furthermore, the results of electricity demand estimation in the industry sector by OLS and EMC methods show that price and income elasticities in the short run are less than unity and they are more than unity in the long run. Price elasticity in the agricultural sector is less than unity both in the short and long run while income elasticity in this sector is more than unity again both in the short and long run. Service sector Price and income elasticities are less than unity in the short run and more than unity in the long run. Additionally, as the price demand elasticity is a variable in these three sectors and according to the estimation findings in each sector, this elasticity has undergone a lot of fluctuations during the time in a way that the amount of the elasticity in all the sectors had decreased at the end of survey in contrast to its start.

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