Elasticity-of-demand Books

I came to this book by happenstance: An extensive analysis I was doing on Price/Demand Elasticity for Electricity was going nowhere. Not being a trained statistician, econometrician or economist myself, I lacked the technical tools to understand where the problem lied. Further, I couldn't find the research supporting my assumptions as to what was going wrong. For example, the pitfalls of time-series data analysis and how cross-sectional or even panel data helped with some of these shortcomings (in no particular order: high sensitivity of the estimates with respect to variations of the sample period; very limited forecasting power (and over-fitting); multicollinearity; asymmetric elasticity...).

This little book is written in layman's terms, and supports assumptions with references to other studies. It turns out that researchers had had the same problems a couple of decades ago, when trying to measure the effect of oil shocks on energy consumption. Effects are long ranging because you don't simply change your car when gas goes up, just like you don't move home or buy a new A/C unit if electricity prices spike.

"Global Warming and Energy Demand" discusses statistical methodologies in enough details to be useful, yet keeps the math to a minimum and systematically points to additional studies for the interested reader. This allowed me to support my assumptions/recommendations with theories, quotes and references.

For the more ambitious reader, there are additional recommendations of other books. In particular, I suggest the "Analysis of Panel data" by Cheng Hsiao (2nd edition) which does a great job at highlighting the different techniques used with Panel data modeling and tracking an extensive body of research on the subject. If you want to dig deeper in cross-sectional analysis and their comparative advantages and drawbacks, look at Frees' "Longitudinal and Panel Data". Both these books are a little heavier on the math, but the second in particular has a chapter on Matrix Algebra for the less quant-savvy reader. Also, both are very affordable, especially compared to the typical academic work (and I was able to purchase both off Amazon for less than Barker's Global Warming and Energy Demand). If you want an easier read and can just afford one book though, I'd go with Hsiao's.


Ok, back to Barker's book. I do recommend it, and not only for the professional looking to understand the effect of global warming on energy demand. This book has a lot more to offer, don't be stopped by a restrictive title. Also, and while an updated edition would be nice for the energy-demand specific stuff, don't let the date (1994) turn you off: All the work on elasticity is very much a-temporal. Until we fully understand the effect of recent Natural Gas and Oil prices hike (might be in 10 years for all I know), the best historical example we can turn to is the oil shocks in the 70s. The book does an amazing job at that.

Norman White is the world expert on Gerard Manley Hopkins, and his new book on Hopkins in Ireland gives a clear and stunningly sad picture of the last years of Hopkins' life. As usual, White's prose is clear and nuanced. We are all lucky to have White as a lover/critic of the sublime Gerard Manley Hopkins.