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A new energy decomposition method: perfect in decomposition and consistent in aggregation

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  • Ang, B.W.
  • Liu, F.L.

Abstract

A new energy decomposition method, called the Log-Mean Divisia Index Method I (LMDI I), is presented. It has the desirable properties of perfect decomposition and consistency in aggregation. Perfect decomposition ensures that the decomposition results obtained do not contain a residual term. Consistency in aggregation allows estimates for sub-groups to be aggregated in a consistent manner. The formulation of the new method and the usefulness of aggregation consistency in energy decomposition studies are described. Two case studies on energy-related CO2 emissions are presented.

Suggested Citation

  • Ang, B.W. & Liu, F.L., 2001. "A new energy decomposition method: perfect in decomposition and consistent in aggregation," Energy, Elsevier, vol. 26(6), pages 537-548.
  • Handle: RePEc:eee:energy:v:26:y:2001:i:6:p:537-548
    DOI: 10.1016/S0360-5442(01)00022-6
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    References listed on IDEAS

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    1. Ang, B. W. & Pandiyan, G., 1997. "Decomposition of energy-induced CO2 emissions in manufacturing," Energy Economics, Elsevier, vol. 19(3), pages 363-374, July.
    2. Hulten, Charles R, 1973. "Divisia Index Numbers," Econometrica, Econometric Society, vol. 41(6), pages 1017-1025, November.
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    5. 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.
    6. Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
    7. Laurent Viguier, 1999. "Emissions of SO2, NOx and CO2 in Transition Economies: Emission Inventories and Divisia Index Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 59-87.
    8. 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.
    9. Sun, J.W. & Malaska, P., 1998. "CO2 emission intensities in developed countries 1980–1994," Energy, Elsevier, vol. 23(2), pages 105-112.
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    11. Ang, B. W., 1995. "Multilevel decomposition of industrial energy consumption," Energy Economics, Elsevier, vol. 17(1), pages 39-51, January.
    12. Boyd, Gale A. & Hanson, Donald A. & Sterner, Thomas, 1988. "Decomposition of changes in energy intensity : A comparison of the Divisia index and other methods," Energy Economics, Elsevier, vol. 10(4), pages 309-312, October.
    13. Sato, Kazuo, 1976. "The Ideal Log-Change Index Number," The Review of Economics and Statistics, MIT Press, vol. 58(2), pages 223-228, May.
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