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Decomposition analysis and the mean-rate-of-change index

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  • Lenzen, Manfred
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    Abstract

    The mean-rate-of-change index (MRCI) is a recent addition to the suite of decomposition analysis (DA) methods. In addition to the arithmetic mean used by its originators, the MRCI can be formulated incorporating any type of mean. When the logarithmic mean is used, the MRCI is equivalent to the logarithmic mean Divisia index. The MRCI is said to produce plausible decompositions, and to be able to handle negative values. However, regarding the sign and magnitude of decomposition terms, the MRCI is affected by the same distortions and inconsistencies as other DA methods, and generally does not produce more plausible results. Moreover, the MRCI's ability to handle negative values is not necessarily an advantage in DA studies using input-output data. Finally, the MRCI is not robust.

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    Bibliographic Info

    Article provided by Elsevier in its journal Applied Energy.

    Volume (Year): 83 (2006)
    Issue (Month): 3 (March)
    Pages: 185-198

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    Handle: RePEc:eee:appene:v:83:y:2006:i:3:p:185-198

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    Keywords: Mean-rate-of-change index Decomposition analysis;

    References

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    Cited by:
    1. Cahill, Caiman J. & Ó Gallachóir, Brian P., 2010. "Monitoring energy efficiency trends in European industry: Which top-down method should be used?," Energy Policy, Elsevier, vol. 38(11), pages 6910-6918, November.
    2. Ang, B.W. & Liu, Na, 2007. "Negative-value problems of the logarithmic mean Divisia index decomposition approach," Energy Policy, Elsevier, vol. 35(1), pages 739-742, January.
    3. Su, Bin & Ang, B.W., 2012. "Structural decomposition analysis applied to energy and emissions: Some methodological developments," Energy Economics, Elsevier, vol. 34(1), pages 177-188.
    4. Achão, Carla & Schaeffer, Roberto, 2009. "Decomposition analysis of the variations in residential electricity consumption in Brazil for the 1980-2007 period: Measuring the activity, intensity and structure effects," Energy Policy, Elsevier, vol. 37(12), pages 5208-5220, December.

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