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Price, Environmental Regulation, and Fuel Demand: Econometric Estimates for Japanese Manufacturing Industries


  • Isamu Matsukawa
  • Yoshifumi Fujii
  • Seishi Madono


In this paper, we analyze interfuel substitution according to Japanese manufacturing sectors. We examine the impact of environmental regulations and technical changes on fuel choice, and the effects of price on fuel substitution, using pooled data on fuel consumption and purchase price for 58 regions in the period 1980-88. The empirical results, based on the estimation of translog unit fuel cost functions by sector, indicate that (1) substitution possibilities were found for most combinations of fuel types in every sector; and (2) environmental regulations and technical changes significantly impact fuel consumption for most sectors, but their effects on fuel demand differ both across sectors and fuel types.

Suggested Citation

  • Isamu Matsukawa & Yoshifumi Fujii & Seishi Madono, 1993. "Price, Environmental Regulation, and Fuel Demand: Econometric Estimates for Japanese Manufacturing Industries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 37-56.
  • Handle: RePEc:aen:journl:1993v14-04-a03

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    References listed on IDEAS

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    Cited by:

    1. Pettersson, Fredrik & Söderholm, Patrik & Lundmark, Robert, 2012. "Fuel switching and climate and energy policies in the European power generation sector: A generalized Leontief model," Energy Economics, Elsevier, vol. 34(4), pages 1064-1073.
    2. Recalde, Marina & Ramos-Martin, Jesús, 2012. "Going beyond energy intensity to understand the energy metabolism of nations: The case of Argentina," Energy, Elsevier, vol. 37(1), pages 122-132.
    3. Soderholm, Patrik, 2001. "Fossil fuel flexibility in west European power generation and the impact of system load factors," Energy Economics, Elsevier, vol. 23(1), pages 77-97, January.
    4. Lundmark, Robert & Soderholm, Patrik, 2004. "Estimating and decomposing the rate of technical change in the Swedish pulp and paper industry: A general index approach," International Journal of Production Economics, Elsevier, vol. 91(1), pages 17-35, September.
    5. KITAMURA Toshihiko & MANAGI Shunsuke, 2016. "Substitution between Purchased Electricity and Fuel for Onsite Power Generation in the Manufacturing Industry: Plant level analysis in Japan," Discussion papers 16007, Research Institute of Economy, Trade and Industry (RIETI).
    6. Clarke, Rosemary & Edwards, T Huw, 1998. "Deregulation of the Japanese oil products market," Energy Policy, Elsevier, vol. 26(2), pages 129-141, February.

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    JEL classification:

    • F0 - International Economics - - General


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