Research of Energy and Non-energy Substitution for Industrial Sector——Based on Muti-elasticity Method

Abstract

Abstract:

With the limitation of energy supply, the uncertainty of substitution between energy and non-energyfactors is regarded as a key process to determine the energy efficiency improvement, new energy development and climate change mitigation policies. Taking the whole industry and 36 sub-industry sectors as samplings, the current paper applies the translog cost function specification to estimate the energy and non-energy own-price substitution, CPE substitution, AES, MES and SES during 1994-2011. The obtained results show several points. (1) The own-price substitution elasticities of capital, labor and energy are negative, and those for energy are the smallest, labor and capital hold the first place. (2) Energy and capital are substitutes and remain fairly stable in the time series, and energy and labor are substitutes except that in 2011 with mixing performance. (3) Among the estimates from the four forms of elasticities of substitution, 30 sub-industries demonstrate substantial substitution possibilities between energy and capital, and 21 sub-industries witness that energy and labor is complementary. (4) The substitution values obtained by CPE are smaller than those measured by MES and SES which are easy to find substitutes between two inputs.

Key words: energy, elasticities of substitution, factor substitution, translog cost function

Zha Donglan, Si Jiansong, Zhou Dequn, Xue Chen. Research of Energy and Non-energy Substitution for Industrial Sector——Based on Muti-elasticity Method[J]. , 2016, 28(6): 180-191.

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