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On Biased Technical Change: Was technological change in Japan electricity-saving?

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  • SATO Hitoshi

Abstract

Since the Great East Japan Earthquake, electricity generation has declined in Japan, and electricity prices have allegedly increased. The literature on biased technical change suggests that such electricity supply constraints may induce a biased technical change. This paper explores the extent to which the technical change in Japanese industries is biased, using a system of translog cost share equations where electricity and non-electric energy are separately treated as inputs. Using Japanese industry data over the 1973-2008 period, our findings confirm that technical change has been energy-saving but not electricity-saving in many industries, and that it tends to be labor-saving and capital-using. As a result, factor prices are much more important than technical change as a determinant of electricity's cost share.

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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 13077.

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Length: 37 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:eti:dpaper:13077

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  1. Matsukawa Isamu & Madono Seishi & Nakashima Takako, 1993. "An Empirical Analysis of Ramsey Pricing in Japanese Electric Utilities," Journal of the Japanese and International Economies, Elsevier, vol. 7(3), pages 256-276, September.
  2. Berndt, Ernst R & Wood, David O, 1975. "Technology, Prices, and the Derived Demand for Energy," The Review of Economics and Statistics, MIT Press, vol. 57(3), pages 259-68, August.
  3. Berndt, Ernst R, 1976. "Reconciling Alternative Estimates of the Elasticity of Substitution," The Review of Economics and Statistics, MIT Press, vol. 58(1), pages 59-68, February.
  4. HOSOE Nobuhiro & AKIYAMA Shu-ichi, 2008. "Regional Electric Power Demand in Japan," Discussion papers 08005, Research Institute of Economy, Trade and Industry (RIETI).
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