This thesis studies the income elasticity and the price elasticity of the primary energy demand of Korea.
Rather than absolute energy consumption, we utilize the income adjusted primary energy intensity. In this way, more stable observations are derived from raw data.
Considering that the energy consumption is a derived demand via energy using equipments, a lag mechanism is introduced.
Using time series data from 1961 through 1979, the elasticities are estimated and the traceabilities are checked. Nonlinear estimation of TSP is utilized first and after assuming the value of the lag parameter, several linear regressions are also tried.
Based on the "best" equation, we attempt to forecast the primary energy demands up to year 2000 under three different sets of energy price scenarios and compare the results with the Korean official 5th five-year plan at least up to year 1986.