Modelling energy and non-energy substitution: A brief survey of elasticities
Estimating the degree of substitution between energy and non-energy inputs is the key for any evaluation of environmental and energy policies. Yet, given the variety of substitution elasticities, the central question arises as to which measure would be most appropriate. Apparently, Allen's elasticities of substitution have been the most-used measures in applied production analysis. In line with Frondel (2004), this paper argues that cross-price elasticities are preferable for many practical purposes. This conclusion is based on a survey of classical substitution measures, such as those from Allen, Morishima, and McFadden. The survey highlights the fact that cross-price elasticities are their essential ingredients.
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.:
- 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.
- Frondel, Manuel, 2004. "Empirical assessment of energy-price policies: the case for cross-price elasticities," Energy Policy, Elsevier, vol. 32(8), pages 989-1000, June.
- Fuss, Melvyn & McFadden, Daniel & Mundlak, Yair, 1978. "A Survey of Functional Forms in the Economic Analysis of Production," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.), Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 4 McMaster University Archive for the History of Economic Thought.
- Frondel, Manuel & Schmidt, Christoph M., 2003.
"Rejecting capital-skill complementarity at all costs,"
Elsevier, vol. 80(1), pages 15-21, July.
- Frondel, Manuel & Schmidt, Christoph M., 2001. "Rejecting Capital-Skill Complementarity at all Costs," IZA Discussion Papers 316, Institute for the Study of Labor (IZA).
- Frondel, Manuel & Schmidt, Christoph M., 2001. "Rejecting capital-skill complementarity at all costs," ZEW Discussion Papers 01-27, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Kintis, Andreas A. & Panas, Epaminondas E., 1989. "The capital--energy controversy: further results," Energy Economics, Elsevier, vol. 11(3), pages 201-212, July.
- Y. Mundlak, 1968. "Elasticities of Substitution and the Theory of Derived Demand," Review of Economic Studies, Oxford University Press, vol. 35(2), pages 225-236.
- 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.
- Frondel, Manuel & Schmidt, Christoph M., 2004. "Facing the truth about separability: nothing works without energy," Ecological Economics, Elsevier, vol. 51(3-4), pages 217-223, December.
- Harty D. Saunders, 1992. "The Khazzoom-Brookes Postulate and Neoclassical Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 131-148.
- Saunders, Harry D., 2008. "Fuel conserving (and using) production functions," Energy Economics, Elsevier, vol. 30(5), pages 2184-2235, September.
- Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-88, September.
- Manuel Frondel & Christoph M. Schmidt, 2006.
"The Empirical Assessment of Technology Differences: Comparing the Comparable,"
The Review of Economics and Statistics,
MIT Press, vol. 88(1), pages 186-192, February.
- Schmidt, Christoph M. & Frondel, Manuel, 2002. "The empirical assessment of technology differences: comparing the comparable," ZEW Discussion Papers 02-63, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Manuel Frondel & Christoph M. Schmidt, 2002. "The Capital-Energy Controversy: An Artifact of Cost Shares?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 53-79.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:39:y:2011:i:8:p:4601-4604. 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: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.