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Energy Efficiency in Transition Economies: A Stochastic Frontier Approach

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  • Antonio Carvalho

    (Centre for Energy Economics Research and Policy, Heriot-Watt University)

Abstract

The paper outlines and estimates a measure of underlying efficiency in electricity consumption for an unbalanced panel of 28 transition economies and 5 Western European OECD countries in the period 1994-2007, by estimating a Bayesian Generalized True Random Effects (GTRE) stochastic frontier model that estimates both persistent and transient inefficiency. The properties of alternative GTRE estimation methods in small samples are explored to guide the estimation strategy. The paper analyses the behaviour of underlying efficiency in electricity consumption in these economies after accounting for time-invariant technological differences. After outlining the specific characteristics of the transition economies and their heterogeneous structural economic changes, an aggregate electricity demand function is estimated to obtain efficiency scores that give new insights for transition economies than a simple analysis of energy intensity. There is some evidence of convergence between the CIS countries and a block of Eastern European and selected OECD countries, although other country groups do not follow this tendency, such as the Balkans.

Suggested Citation

  • Antonio Carvalho, 2016. "Energy Efficiency in Transition Economies: A Stochastic Frontier Approach," CEERP Working Paper Series 004, Centre for Energy Economics Research and Policy, Heriot-Watt University.
    • Handle: RePEc:hwc:wpaper:004
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    File URL: http://ceerp.hw.ac.uk/RePEc/hwc/wpaper/004.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lina Sineviciene & Iryna Sotnyk & Oleksandr Kubatko, 2017. "Determinants of energy efficiency and energy consumption of Eastern Europe post-communist economies," Energy & Environment, , vol. 28(8), pages 870-884, December.
    2. Twerefou, Daniel Kwabena & Abeney, Jacob Opantu & Toman, Michael & Turkson, Festus Ebo & Baffour, Priscilla Twumasi, 2023. "Household Electricity Consumption Inefficiency and Poverty: Evidence from Ghana," EfD Discussion Paper 23-11, Environment for Development, University of Gothenburg.
    3. Twerefou, Daniel Kwabena & Abeney, Jacob Opantu, 2020. "Efficiency of household electricity consumption in Ghana," Energy Policy, Elsevier, vol. 144(C).
    4. Dilawar Khan & Muhammad Nouman & József Popp & Muhammad Asif Khan & Faheem Ur Rehman & Judit Oláh, 2021. "Link between Technically Derived Energy Efficiency and Ecological Footprint: Empirical Evidence from the ASEAN Region," Energies, MDPI, vol. 14(13), pages 1-16, June.

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    More about this item

    Keywords

    Electricity Consumption; Transition Economies; Energy Efficiency; Stochastic Frontier;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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