The author examines the measurement and conceptual issues that complicate analytical work in the energy demand field. Successful policy decisions depend on the use of appropriate data and analytic methods; because the demand side of the energy-economy interaction is highly complex, this study focuses on the more basic economic and energy concepts and methods in demand analyses. He critiques measures used to analyze the relationship of energy to economic growth and summarizes the various demand estimation methods and their results. Highlighting the problems faced by analysts in developing countries who often have limited time and inadequate data, she discusses the serious implications of basing policy decisions on questionable analytic methods and data.

Corazon Morales Siddayao is research coordinator and leader of the Energy and Industrialization Project at the East-West Center and is affiliate professor of economics at the University of Hawaii.

1 Understanding the Concept of Energy 2 Understanding the Demand for Energy 3 The Energy /GDP Ratio as a Measure of Energy Demand: Shortcomings 4 Estimation Problems: Income and Price Elasticities of Energy 5 Estimation Problems: The Complementarity/ Substitution Issue