TY - JOUR
T1 - The economic value of residential natural gas consumption
T2 - The case of Korea
AU - Lee, J. S.
AU - Yoo, S. H.
PY - 2013/10/2
Y1 - 2013/10/2
N2 - Natural gas (NG) is the basic building block of economic development and constitutes one of the vital infrastructural inputs in socioeconomic development. The demand for NG has been increasing due to extensive urbanization, industrialization, and a rise in the standard of living, as is the case with residential electricity consumption in Seoul, Korea. This article attempts to estimate the consumer surplus and the economic value of the residential consumption of NG in Seoul to assist in decision-making in NG management. The estimated consumer surplus represents the value of the area under the demand curve, above the actual price that is paid for residential NG consumption. The estimated annual consumer surplus and economic value amount is KRW 3,680.8 and 6,882.6 billion (USD 2.83 and 5.29 billion), respectively. The estimates per cubic meter were KRW 758.6 (USD 0.58) and KRW 1,418.5 (USD 1.09), respectively, which imply that the consumer surplus and the economic value of residential NG consumption significantly outweigh the price of NG in 2008 of KRW 659.9 (USD 0.51) per cubic meter.
AB - Natural gas (NG) is the basic building block of economic development and constitutes one of the vital infrastructural inputs in socioeconomic development. The demand for NG has been increasing due to extensive urbanization, industrialization, and a rise in the standard of living, as is the case with residential electricity consumption in Seoul, Korea. This article attempts to estimate the consumer surplus and the economic value of the residential consumption of NG in Seoul to assist in decision-making in NG management. The estimated consumer surplus represents the value of the area under the demand curve, above the actual price that is paid for residential NG consumption. The estimated annual consumer surplus and economic value amount is KRW 3,680.8 and 6,882.6 billion (USD 2.83 and 5.29 billion), respectively. The estimates per cubic meter were KRW 758.6 (USD 0.58) and KRW 1,418.5 (USD 1.09), respectively, which imply that the consumer surplus and the economic value of residential NG consumption significantly outweigh the price of NG in 2008 of KRW 659.9 (USD 0.51) per cubic meter.
KW - consumer surplus
KW - economic value
KW - Korea
KW - natural gas
KW - residential consumption
UR - https://www.scopus.com/pages/publications/84878790900
U2 - 10.1080/15567240903468499
DO - 10.1080/15567240903468499
M3 - Article
AN - SCOPUS:84878790900
SN - 1556-7249
VL - 8
SP - 313
EP - 319
JO - Energy Sources, Part B: Economics, Planning and Policy
JF - Energy Sources, Part B: Economics, Planning and Policy
IS - 4
ER -