ESTIMATING DEMAND OF TURKISH ENERGY MARKET: A MULTIVARIATE REGRESSION MODEL

Abstract

Energy is a fundamental factor for economic development. Although in recent years there is a development in studies on an energy economics they are focused on specific energy sources. In this study natural gas, electricity and oil consumption which are the energy sources that the greatest market share of world and Turkey are investigating. In this investigation multivariate linear regression model is used. MVR model is a system of linear regression equations having the same set of independent variables. In this model within-equation, linear restrictions are testable on an equation-by-equation basis using a standard F test. The aim of the study is estimating demand of these three energy sources which are mentioned above. For this purpose, the regression model estimated which has a natural gas, electricity and oil consumption as dependent variables and price of these sources, income and population as independent variables by using 2001:01-2010:06 monthly data. Except for oil prices, coefficients of the model are statistically significant in all models. Coefficients are interpreted economically and determined that supply and demand move peculiar to Turkish energy markets despite the general expectations.