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International evidence on aggregate short-run and long-run interfuel substitution

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Listed author(s):
  • Serletis, Apostolos
  • Timilsina, Govinda
  • Vasetsky, Olexandr

Abstract

In this paper, we build on recent work by Serletis et al. (2010, in press) and report short- and long-run estimates of aggregate interfuel substitution for a number of OECD and non-OECD countries. In doing so, we use recent pooled intercountry data (since 1980), and state-of-the-art advances in microeconometrics, including duality theory and flexible functional forms. Also, motivated by the widespread practice in the empirical energy demand literature of ignoring theoretical regularity, we estimate our model subject to global curvature (but not monotonicity), using methods developed by Diewert and Wales (1987). We provide inference, and also a policy perspective, using parameter estimates that are consistent with the theoretical regularity conditions of neoclassical microeconomic theory.

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Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 33 (2011)
Issue (Month): 2 (March)
Pages: 209-216

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Handle: RePEc:eee:eneeco:v:33:y:2011:i:2:p:209-216
Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

Keywords: Flexible functional forms Normalized quadratic (NQ) cost function Theoretical regularity;

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Cited by:

  1. Finn Roar Aune & Kristine Grimsrud & Lars Lindholt & Knut Einar Rosendahl & Halvor Briseid Storrøsten, 2016. "Oil consumption subsidy removal in OPEC and other Non-OECD countries. Oil market impacts and welfare effects," Discussion Papers 846, Statistics Norway, Research Department.
  2. Ali Jadidzadeh and Apostolos Serletis, 2016. "Sectoral Interfuel Substitution in Canada: An Application of NQ Flexible Functional Forms," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
  3. Xingang, Zhao & Pingkuo, Liu, 2013. "Substitution among energy sources: An empirical analysis on biomass energy for fossil fuel of China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 194-202.
  4. Ma, Chunbo & Stern, David I., 2016. "Long-run estimates of interfuel and interfactor elasticities," Resource and Energy Economics, Elsevier, vol. 46(C), pages 114-130.
  5. Papageorgiou, Chris & Saam, Marianne & Schulte, Patrick, 2013. "Elasticity of substitution between clean and dirty energy inputs: A macroeconomic perspective," ZEW Discussion Papers 13-087, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Steinbuks, Jevgenijs & Narayanan, Badri G., 2015. "Fossil fuel producing economies have greater potential for industrial interfuel substitution," Energy Economics, Elsevier, vol. 47(C), pages 168-177.
  7. Finn Roar Aune & Ann Christin Bøeng & Snorre Kverndokk & Lars Lindholt & Knut Einar Rosendahl, 2015. "Fuel Efficiency Improvements - Feedback Mechanisms and Distributional Effects in the Oil Market," CESifo Working Paper Series 5478, CESifo Group Munich.
  8. Patrick Schulte & Heinz Welsch & Sascha Rexhäuser, 2016. "ICT and the Demand for Energy: Evidence from OECD Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(1), pages 119-146, January.
  9. Xie, Chunping & Hawkes, Adam D., 2015. "Estimation of inter-fuel substitution possibilities in China's transport industry using ridge regression," Energy, Elsevier, vol. 88(C), pages 260-267.
  10. Dongfeng Chang & Apostolos Serletis, 2014. "The Demand For Gasoline: Evidence From Household Survey Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 291-313, 03.
  11. Chang, Yoosoon & Kim, Chang Sik & Miller, J. Isaac & Park, Joon Y. & Park, Sungkeun, 2014. "Time-varying Long-run Income and Output Elasticities of Electricity Demand with an Application to Korea," Energy Economics, Elsevier, vol. 46(C), pages 334-347.
  12. Shahiduzzaman, Md. & Layton, Allan, 2015. "Changes in CO2 emissions over business cycle recessions and expansions in the United States: A decomposition analysis," Applied Energy, Elsevier, vol. 150(C), pages 25-35.

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