Electricity demand of manufacturing sector in Turkey: A translog cost approach
This paper models factor demand for manufacturing sector in Turkey. We estimated a translog cost function with four factor consist of capital, labor, intermediate input and electricity over the 1980-2001. Our objective, taking in the consideration electricity as production input, was twofold: on the one hand, to estimate the price elasticity of electricity demand in manufacturing sector, and on the other hand to use cross-price and Morishima Elasticities of Substitution results for structural analysis regarding effects of electricity liberalization which initiated in 2001. Empirical result shows that electricity demand is relatively price sensitive (-Â 0.85). Our result in terms of electricity price is consistent with the previous studies. While electricity-labor and electricity-capital inputs are complementary, results indicate the existence of substitution possibilities between electricity and intermediate input. This means that changes in electricity prices have impact on labor demand and investment demand. These results have important implications for public policy.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Héctor Salgado Banda & Lorenzo E. Bernal Verdugo, 2007. "Translog Cost Functions: An Application for Mexican Manufacturing," Working Papers 2007-08, Banco de México.
- Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
- Sterner, Thomas, 1989. " Factor Demand and Substitution in a Developing Country: Energy Use in Mexican Manufacturing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 91(4), pages 723-39.
- Erdogdu, Erkan, 2007.
"Regulatory Reform in Turkish Energy Industry: An analysis,"
19100, University Library of Munich, Germany.
- Erdogdu, Erkan, 2007. "Regulatory reform in Turkish energy industry: An analysis," Energy Policy, Elsevier, vol. 35(2), pages 984-993, February.
- Christopoulos, Dimitris K., 2000. "The demand for energy in Greek manufacturing," Energy Economics, Elsevier, vol. 22(5), pages 569-586, October.
- Al-Mutairi, Naief & Burney, Nadeem A., 2002. "Factor substitution, and economies of scale and utilisation in Kuwait's crude oil industry," Energy Economics, Elsevier, vol. 24(4), pages 337-354, July.
- Danish Hashim, 2004. "Cost & productivity in Indian textiles: Post MFA implications," Indian Council for Research on International Economic Relations, New Delhi Working Papers 147, Indian Council for Research on International Economic Relations, New Delhi, India.
- Bahçe, Serdal & Taymaz, Erol, 2008. "The impact of electricity market liberalization in Turkey: "Free consumer" and distributional monopoly cases," Energy Economics, Elsevier, vol. 30(4), pages 1603-1624, July.
- Chung, Jae Wan, 1987. "On the Estimation of Factor Substitution in the Translog Model," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 409-17, August.
- Iqbal, Mahmood, 1986. "Substitution of Labour, Capital and Energy in the Manufacturing Sector of Pakistan," Empirical Economics, Springer, vol. 11(2), pages 81-95.
- Urga, Giovanni & Walters, Chris, 2003. "Dynamic translog and linear logit models: a factor demand analysis of interfuel substitution in US industrial energy demand," Energy Economics, Elsevier, vol. 25(1), pages 1-21, January.
- Ulusoy, Ali & Oguz, Fuat, 2007. "The privatization of electricity distribution in Turkey: A legal and economic analysis," Energy Policy, Elsevier, vol. 35(10), pages 5021-5034, October.
- Fuller, Frank H., 1999. "Farm-Level Feed Demand In Turkey," 1999 Annual meeting, August 8-11, Nashville, TN 21534, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Griffin, James M & Gregory, Paul R, 1976. "An Intercountry Translog Model of Energy Substitution Responses," American Economic Review, American Economic Association, vol. 66(5), pages 845-57, December.
- Frank H. Fuller & A. Ali Koc & Haydar S. Sengul & Ahmet Bayaner, 1999. "Farm-Level Feed Demand in Turkey," Food and Agricultural Policy Research Institute (FAPRI) Publications 99-wp226, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
- 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.
- Altinay, Galip & Karagol, Erdal, 2005. "Electricity consumption and economic growth: Evidence from Turkey," Energy Economics, Elsevier, vol. 27(6), pages 849-856, November.
- Cho, Won G. & Nam, Kiseok & Pagan, Jose A., 2004. "Economic growth and interfactor/interfuel substitution in Korea," Energy Economics, Elsevier, vol. 26(1), pages 31-50, January.
- Medina, J. & Vega-Cervera, J. A., 2001. "Energy and the non-energy inputs substitution: evidence for Italy, Portugal and Spain," Applied Energy, Elsevier, vol. 68(2), pages 203-214, February.
- Uri, Noel D, 1982. "The Demand for Energy in the United Kingdom," Bulletin of Economic Research, Wiley Blackwell, vol. 34(1), pages 43-56, May.
- Koebel, Bertrand M. & Falk, Martin, 1999. "Curvature conditions and substitution pattern among capital, energy, materials and heterogeneous labour," ZEW Discussion Papers 99-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- J. R. Moroney & John M. Trapani, 1981. "Factor Demand and Substitution in Mineral-Intensive Industries," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 272-284, Spring.
- Frank H. Fuller & A. Ali Koc & Haydar S. Sengul & Ahmet Bayaner, 1999. "Farm-Level Feed Demand in Turkey," Center for Agricultural and Rural Development (CARD) Publications 99-wp226, Center for Agricultural and Rural Development (CARD) at Iowa State University.
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:32:y:2010:i:3:p:609-615. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.