Modeling final energy demand and the impacts of energy price reform in Saudi Arabia

We model energy demand across five end-use sectors and 15 products in Saudi Arabia, generating comprehensive price income elasticity estimates. Using the Structural Time Series Model, we demonstrate that trends underlying are generally stochastic, underscoring importance of using such models for estimating unbiased elasticities. Our estimates reveal Arabia is inelastic all cases most cases, with industrial natural gas electricity being only exceptions. Nevertheless, find extensive variation elasticities products, highlighting sector- product-specific values not assuming they similar same country. then use our estimated to conduct a welfare analysis reforms implemented 2016 2018. reveals reform delivered total annual gain 11.6 billion 2010 United States Dollars (USD) 2016. Following 2018 reform, increased 17.0 USD also estimate cumulative carbon dioxide emissions avoided between due at 164 million tonnes.