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Comparing structural decomposition analysis and index

  • Hoekstra, Rutger
  • van den Bergh, Jeroen C. J. M.

To analyze and understand historical changes in economic, environmental, employment or other socio-economic indicators, it is useful to assess the driving forces or determinants that underlie these changes. Two techniques for decomposing indicator changes at the sector level are structural decomposition analysis (SDA) and index decomposition analysis (IDA). For example, SDA and IDA have been used to analyze changes in indicators such as energy use, CO2-emissions, labor demand and value added. The changes in these variables are decomposed into determinants such as technological, demand, and structural effects. SDA uses information from input-output tables while IDA uses aggregate data at the sector-level. The two methods have developed quite independently, which has resulted in each method being characterized by specific, unique techniques and approaches. This paper has three aims. First, the similarities and differences between the two approaches are summarized. Second, the possibility of transferring specific techniques and indices is explored. Finally, a numerical example is used to illustrate differences between the two approaches.

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Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 25 (2003)
Issue (Month): 1 (January)
Pages: 39-64

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Handle: RePEc:eee:eneeco:v:25:y:2003:i:1:p:39-64
Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

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  1. Rutger Hoekstra & Jeroen van den Bergh, 2002. "Structural Decomposition Analysis of Physical Flows in the Economy," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(3), pages 357-378, November.
  2. Erik Dietzenbacher & Bart Los, 1998. "Structural Decomposition Techniques: Sense and Sensitivity," Economic Systems Research, Taylor & Francis Journals, vol. 10(4), pages 307-324.
  3. Sun, J. W., 1998. "Changes in energy consumption and energy intensity: A complete decomposition model," Energy Economics, Elsevier, vol. 20(1), pages 85-100, February.
  4. Ang, B.W. & Zhang, F.Q., 2000. "A survey of index decomposition analysis in energy and environmental studies," Energy, Elsevier, vol. 25(12), pages 1149-1176.
  5. Xiaoli Han & TK. Lakshmanan, 1994. "Structural Changes and Energy Consumption in the Japanese Economy 1975-95: An Input-Output Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 165-188.
  6. B. W. Ang & Ki-Hong Choi, 1997. "Decomposition of Aggregate Energy and Gas Emission Intensities for Industry: A Refined Divisia Index Method," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 59-73.
  7. X. Q. Liu & B. W. Ang & H.L. Ong, 1992. "The Application of the Divisia Index to the Decomposition of Changes in Industrial Energy Consumption," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 161-178.
  8. Ang, B. W. & Lee, P. W., 1996. "Decomposition of industrial energy consumption: The energy coefficient approach," Energy Economics, Elsevier, vol. 18(1-2), pages 129-143, April.
  9. Erik Dietzenbacher & Alex R. Hoen & Bart Los, 2000. "Labor Productivity in Western Europe 1975-1985: An Intercountry, Interindustry Analysis," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 425-452.
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