TY - JOUR
T1 - Effects of technical and allocative inefficiencies on energy and nonenergy elasticities
T2 - an analysis of energy-intensive industries in China
AU - Zha, Donglan
AU - Kavuri, Anil Savio
N1 - Publisher Copyright:
© 2016 Shandong Normal University.
PY - 2016/10/1
Y1 - 2016/10/1
N2 - Elasticity of substitution is traditionally estimated while ignoring technical and allocative inefficiencies, which could bias the estimates. We estimate elasticity of substitution for Chinese energy-intensive sectors by incorporating these inefficiencies. The results show most of the sectors are low substitutes between input factors and stress important differences among energy-intensive sectors. Concerning the cross-price elasticity for energy, with respect to capital (labor), the sectors are mainly characterized by weak substitutability or complementary. These imply the production structure is quite rigid and capital cannot be so readily used as a substitute for energy.
AB - Elasticity of substitution is traditionally estimated while ignoring technical and allocative inefficiencies, which could bias the estimates. We estimate elasticity of substitution for Chinese energy-intensive sectors by incorporating these inefficiencies. The results show most of the sectors are low substitutes between input factors and stress important differences among energy-intensive sectors. Concerning the cross-price elasticity for energy, with respect to capital (labor), the sectors are mainly characterized by weak substitutability or complementary. These imply the production structure is quite rigid and capital cannot be so readily used as a substitute for energy.
KW - Elasticities of substitution
KW - energy-intensive sectors
KW - technical and allocative inefficiencies
UR - http://www.scopus.com/inward/record.url?scp=84997235734&partnerID=8YFLogxK
U2 - 10.1080/10042857.2016.1258805
DO - 10.1080/10042857.2016.1258805
M3 - Article
SN - 2096-9589
VL - 14
SP - 292
EP - 297
JO - Chinese Journal of Population Resources and Environment
JF - Chinese Journal of Population Resources and Environment
IS - 4
ER -