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Population Density and Efficiency in Energy Consumption: An empirical analysis of service establishments

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  • MORIKAWA Masayuki

Abstract

The achievement of both sustainable economic growth and reductions in CO2 emissions has been an important policy agenda in recent years. This study, using novel establishment-level microdata from the Energy Consumption Statistics, empirically analyzes the effect of urban density on energy intensity in the service sector. According to the analysis, the efficiency of energy consumption in service establishments is higher for densely populated cities. Quantitatively, after controlling for differences among industries, energy efficiency increases by approximately 12% when the density in a municipality population doubles. This result suggests that, given a structural transformation toward the service economy, deregulation of excessive restrictions hindering urban agglomeration, and investment in infrastructure in city centers would contribute to environmentally friendly economic growth.

Suggested Citation

  • MORIKAWA Masayuki, 2011. "Population Density and Efficiency in Energy Consumption: An empirical analysis of service establishments," Discussion papers 11058, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:11058
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    More about this item

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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