ESTIMATING THE DEMAND ELASTICITIES OF LIQUEFIED NATURAL GAS IN THE UNITED STATES

Abdul Waheed

Lake Washington Institute of Technology

ABSTRACT

This study estimates the demand elasticity of U.S. liquefied natural gas (LNG). It also estimates its price and income elasticity. A static log-linear model employing Ordinary Least Square estimation technique is used to obtain price and income elasticity of U.S. LNG. Data used covers the period 1988-2010. The resulting price and income elasticity were found to be -2.526 and 4.028 respectively. Thus, both price and income elasticity of demand for LNG in the U.S. is elastic.