Economic Factors affecting demand for gas in Iran

In this study the autoregressive distributed lag model and error correction model to estimate Hazard function is used during the years 1377-1394. The results show that in the short term and long term there is substitution between electricity and natural gas in the domestic sector. But the price elasticity of demand relative to the price of electricity is less than 5.0, this result indicates that changes in electricity prices has little effect on the consumption of natural gas. The elasticity of natural gas demand in the long run than a higher price than the short term and in both cases is estimated inelastic. In the long run price elasticity of natural gas is estimated to be 0.71, this variable among other variables have the greatest impact on natural gas consumption in the domestic sector. Shows that the income elasticity of natural gas in the short and long term for numerous essential goods, The results showed that the coefficient of error correction in the short term -0.72 obtained and confidently expect very significant and mark it as negative. This factor represents the speed of adjustment is relatively high. The imbalance factor of 72 percent for natural gas is adjusted in each period. In the end we can say that the actual electricity and natural gas prices and tariffs, the creation and standardization requirements for insulation of buildings as well as gas appliances, consumer paradigm shift in the culture of consumption and promote the correct use of natural gas can appropriate solutions for reduce natural gas consumption in the domestic sector are balanced.