An Empirical Analysis of Energy Demand in Tunisia

This article assesses the impact of real energy prices on the consumption of different energy sources in Tunisia. We estimate the short-run and long-run energy demand elasticities over the period 1980-2004, where energy demand is specified by a simple partial adjustment model. Our results show that energy demand in Tunisia is generally sensitive to the income level and real prices of energy products. Moreover, the price elasticity and income elasticity differ across energy sources. These findings imply that energy price increases will not only affect energy demand, but also give rise to substitution effects between different forms of energy.