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Natural Gas Availability and the Residential Demand for Energy

Gail R. Blattenberger, Lester D. Taylor, and Robert K.Rennhack

Year: 1983
Volume: Volume 4
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No1-2
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Abstract:
Not all households have access to pipeline-delivered natural gas.This fact affects not only the demand for natural gas but the demand for electricity and fuel oil as well. Since electricity and natural gas are substitutes in cooking, space heating, water heating, and (to a much lesser extent) cooling, the price elasticity of demand for electricity will be larger when gas is available than when it is not. Fuel oil and natural gas are substitutes in cooking, space heating, and water heating, so that oneshould also expect larger price elasticities for fuel oil when gas is available.



Cost Shares, Own, and Cross-Price Elasticities in U.S. Manufacturing with Disaggregated Energy Inputs

Mahmood Moghimzadeh and Kern O. Kymn

Year: 1986
Volume: Volume 7
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol7-No4-4
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Abstract:
Our purpose is to estimate cost shares and own-land cross-price elasticities of the demand for factors in the production of manufacturing output. To achieve more precise estimates than those of previous researchers, we do not consider energy a single unified input. It is disaggregated instead into electric and nonelectric energy. The period considered spans the years 1954 to 1977. The following brief review of the literature outlines the background.Hudson and Jorgenson (1974) studied the demand for manufacturing production factors. They subsequently estimated the own- and cross-price elasticities of demand for the various factors by applying a translog cost function at the industry level. Their model included capital, labor, energy, and nonenergy inputs.



Complementarity-Substitution Relationshipsin the Demand for Time-Differentiated Inputs under Time-of-Use Pricing

Asher Tishler

Year: 1991
Volume: Volume 12
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol12-No3-9
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Abstract:
In this paper we incorporate the non-synchronic responses of different inputs to changes in relative factor prices and develop sufficient conditions under which time-differentiated (over the day) electricity inputs are complements or substitutes. Similar sufficient conditions are developed for time-differentiated labour inputs. We also examine the strong and sometimes one-directional, relationships between the distributions over the day of the demands for labour and electricity. These relationships depend, among other factors, on the objective function of the fine (profit maximization, cost minimization) and on the specific time-of-use (TO U) schedules (of labour, electricity, etc.). Our results are also dependent on the assumption that firms can adjust inputs to changes in input prices on an hourly basis; more specifically, the underlying technology is assumed to be given by an hourly production function. Two issues are emphasized in the analysis. First, we show that short-run cost minimization may be an inappropriate procedure for cost-benefit analysis. Second, under the model developed in this paper, the commonly used weak separability assumption (between electricity and other inputs) implies radically different relationships among the time-differentiated inputs under profit maximization and cost minimization.



Relative Effectiveness of Energy Efficiency Programs versus Market Based Climate Policies in the Chemical Industry

Gale A. Boyd and Jonathan M. Lee

Year: 2020
Volume: Volume 41
Number: Number 3
DOI: 10.5547/01956574.41.3.gboy
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Abstract:
This paper addresses the relative effectiveness of market vs program based climate policies. We compute the carbon price resulting in an equivalent reduction in energy from programs that eliminate the efficiency gap. A reduced-form stochastic frontier energy demand analysis of plant level electricity and fuel data, from energy-intensive chemical sectors, jointly estimates the distribution of energy efficiency and underlying price elasticities. The analysis obtains a decomposition of efficiency into persistent (PE) and time-varying (TVE) components. Total inefficiency is relatively small in most sectors and price elasticities are relatively high. If all plants performed at the 90th percentile of their efficiency distribution, the reduction in energy is between 4% and 37%. A carbon price averaging around $31.51/ton CO2 would achieve reductions in energy use equivalent to all manufacturing plants making improvements to close the efficiency gap.



The Rebound Effect in Energy-Intensive Industries: A Factor Demand Model with Asymmetric Price Response

Anna Dahlqvist, Tommy Lundgren, and Per-Olov Marklund

Year: 2021
Volume: Volume 42
Number: Number 3
DOI: 10.5547/01956574.42.3.adah
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Abstract:
The purpose of this paper is to estimate industry-specific direct rebound effects and to relate these effects to industry energy efficiency programs. The rebound effect represents economic behavior that will offset energy savings from energy efficiency improvements. The paper focuses on four energy intense sectors in Sweden; pulp and paper, iron and steel, chemical, and mining, during 2001�2012. We apply a factor demand model that allows for asymmetric energy price responses, i.e. that firms respond differently to increasing and decreasing energy prices. The results show considerable rebound effects. For electricity and non-fossil fuels, efficiency improvements could even �backfire�. To mitigate this effect, policies, such as voluntary energy efficiency programs, should be combined with an increase in energy taxes if the ambition is to reduce overall energy use.





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