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Estimating the changes in the distribution of energy efficiency in the U.S. automobile assembly industry

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  • Boyd, Gale A.

Abstract

This paper describes the EPA's voluntary ENERGY STAR program and the results of the automobile manufacturing industry's efforts to advance energy management as measured by the updated ENERGY STAR Energy Performance Indicator (EPI). A stochastic single-factor input frontier estimation using the gamma error distribution is applied to separately estimate the distribution of the electricity and fossil fuel efficiency of assembly plants using data from 2003 to 2005 and then compared to model results from a prior analysis conducted for the 1997–2000 time period. This comparison provides an assessment of how the industry has changed over time. The frontier analysis shows a modest improvement (reduction) in “best practice” for electricity use and a larger one for fossil fuels. This is accompanied by a large reduction in the variance of fossil fuel efficiency distribution. The results provide evidence of a shift in the frontier, in addition to some “catching up” of poor performing plants over time.

Suggested Citation

  • Boyd, Gale A., 2014. "Estimating the changes in the distribution of energy efficiency in the U.S. automobile assembly industry," Energy Economics, Elsevier, vol. 42(C), pages 81-87.
  • Handle: RePEc:eee:eneeco:v:42:y:2014:i:c:p:81-87
    DOI: 10.1016/j.eneco.2013.11.008
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    References listed on IDEAS

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    1. William Greene, 2003. "Simulated Likelihood Estimation of the Normal-Gamma Stochastic Frontier Function," Journal of Productivity Analysis, Springer, vol. 19(2), pages 179-190, April.
    2. Freeman, Scott L. & Niefer, Mark J. & Roop, Joseph M., 1997. "Measuring industrial energy intensity: practical issues and problems," Energy Policy, Elsevier, vol. 25(7-9), pages 703-714.
    3. Luis R. Murillo-Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.
    4. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    5. Patterson, Murray G, 1996. "What is energy efficiency? : Concepts, indicators and methodological issues," Energy Policy, Elsevier, vol. 24(5), pages 377-390, May.
    6. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy-efficiency gap What does it mean?," Energy Policy, Elsevier, vol. 22(10), pages 804-810, October.
    7. Huntington, Hillard G., 1994. "Been top down so long it looks like bottom up to me," Energy Policy, Elsevier, vol. 22(10), pages 833-839, October.
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    Cited by:

    1. Gale Boyd & Jonathan M. Lee, 2016. "Measuring Plant Level Energy Efficiency and Technical Change in the U.S. Metal-Based Durable Manufacturing Sector Using Stochastic Frontier Analysis," Working Papers 16-52, Center for Economic Studies, U.S. Census Bureau.
    2. Boyd, Gale A. & Curtis, E. Mark, 2014. "Evidence of an “Energy-Management Gap” in U.S. manufacturing: Spillovers from firm management practices to energy efficiency," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 463-479.
    3. repec:eee:proeco:v:190:y:2017:i:c:p:108-119 is not listed on IDEAS
    4. repec:spr:annopr:v:255:y:2017:i:1:d:10.1007_s10479-015-2053-8 is not listed on IDEAS

    More about this item

    Keywords

    Energy efficiency; Manufacturing; Stochastic frontier; Microdata;

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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