Urban natural gas demand and factors analysis in China: Perspectives of price and income elasticities

Urban natural gas is becoming the main sector driving China's natural gas consumption growth in recent years. This study explores the impacts of urban natural gas price, wage, socioeconomic determinants, and meteorological conditions on urban natural gas demand in China over 2006-2017. Furthermore, this study also analyzes the potential regional heterogeneity and asymmetry in the impacts of gas price and income on China's urban gas demand. Empirical results reveal that: (1) The increased gas price can significantly reduce the urban gas demand, and the average income level may effectively promote the gas demand, also, a strong switching effect exists between electricity and natural gas in urban China; (2) these impacts are heterogeneous in regions among China, urban natural gas demand is largely affected by the gas price in regions with high-gas-price and by income in regions with low-gas-price; and (3) the impact of gas price on urban gas consumption is consistent in regions with different urban natural gas consumption, while the impact of income is asymmetric. This study further provides several policy implications for improving the urban natural gas industry in China. (c) 2021 The Authors. Publishing services by Elsevier B.V. on behalf of KeAi Communications Co. Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/ 4.0/).