Interfuel Substitution: A Meta-Analysis
Interfuel substitutability has been of longstanding interest to energy economists and policy makers. However, there has been no quantitative meta-analysis of this literature. This research report fills this gap by analysing a broad sample of studies of interfuel substitution in the industrial sector, manufacturing industry or sub-industries, and macro-economy of a variety of developed and developing economies. The primary study sample size has been included in the meta-regression to control for publication bias. At the industrial level, results for the shadow elasticities of substitution between coal, oil, gas, and electricity for forty-six primary studies show that, except for gas-electricity and coal-electricity, there are easy substitution possibilities between all the fuel pairs. Substitution possibilities seem more constrained at the macro level and less constrained in sub-industries. Estimates also vary across countries. Publication bias does not appear to be present, but model and data specification issues very significantly affect the estimates derived by each individual study. Estimates from cross-section regressions are generally largest, and fixed effects panel estimates are intermediate. Time-series estimates are mostly much smaller. Econometric research suggests that the fixed effects estimates, although biased downwards, are likely to be the best among the existing studies.
|Date of creation:||Jun 2009|
|Date of revision:|
|Contact details of provider:|| Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 2601|
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: http://www.crawford.anu.edu.au/research_units/eerh/
More information through EDIRC
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.:
- Kim, Bong Chin & Labys, Walter C., 1988. "Application of the translog model of energy substitution to developing countries : The case of Korea," Energy Economics, Elsevier, vol. 10(4), pages 313-323, October.
- Magnus, J.R. & Woodland, A.D., 1987. "Inter-fuel substitution in Dutch manufacturing," Other publications TiSEM ac70331b-1a1e-465e-9ccc-8, Tilburg University, School of Economics and Management.
- Mountain, D. & Hsiao, C., 1988. "A Combined Structural And Flexible Functional Approach For Modeling Energy Substitution," Papers m8815, Southern California - Department of Economics.
- Olivier de La Grandville & Rainer Klump, 2000. "Economic Growth and the Elasticity of Substitution: Two Theorems and Some Suggestions," American Economic Review, American Economic Association, vol. 90(1), pages 282-291, March.
- T. D. Stanley, 2005. "Beyond Publication Bias," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 309-345, 07.
- David Stern, 1994. "Accuracy of the translog function," Applied Economics Letters, Taylor & Francis Journals, vol. 1(10), pages 172-174.
- Bacon, Robert, 1992. "Measuring the possibilities of interfuel substitution," Policy Research Working Paper Series 1031, The World Bank.
- 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.
- Hall, V.B., 1983.
"Industrial Sector Interfuel Substitution Following the First Major Oil Shock,"
67, University of Sydney, School of Economics.
- Hall, V. B., 1983. "Industrial sector interfuel substitution following the first major oil shock," Economics Letters, Elsevier, vol. 12(3-4), pages 377-382.
- David I. Stern, 2004.
"Elasticities of Substitution and Complementarity,"
Rensselaer Working Papers in Economics
0403, Rensselaer Polytechnic Institute, Department of Economics.
- Jon Nelson & Peter Kennedy, 2009. "The Use (and Abuse) of Meta-Analysis in Environmental and Natural Resource Economics: An Assessment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(3), pages 345-377, March.
- Koetse, Mark J. & de Groot, Henri L.F. & Florax, Raymond J.G.M., 2008.
"Capital-energy substitution and shifts in factor demand: A meta-analysis,"
Elsevier, vol. 30(5), pages 2236-2251, September.
- Mark J. Koetse & Henri L.F. de Groot & Raymond J.G.M. Florax, 2006. "Capital-Energy Substitution and Shifts in Factor Demand: A Meta-Analysis," Tinbergen Institute Discussion Papers 06-061/3, Tinbergen Institute.
- Considine, Timothy J., 1989. "Separability, functional form and regulatory policy in models of interfuel substitution," Energy Economics, Elsevier, vol. 11(2), pages 82-94, April.
- Daniel McFadden, 1963. "Constant Elasticity of Substitution Production Functions," Review of Economic Studies, Oxford University Press, vol. 30(2), pages 73-83.
- Stern, David I., 2008. "Derivation of the Hicks Elasticity of Substitution from the Input Distance Function," MPRA Paper 12414, University Library of Munich, Germany.
- Mohamed Nagy Eltony, 2008. "Estimating energy price elasticities for the non-oil manufacturing industries in Kuwait," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 32(2), pages 184-195, 06.
- Mahmud, Syed F., 2000. "The energy demand in the manufacturing sector of Pakistan: some further results," Energy Economics, Elsevier, vol. 22(6), pages 641-648, December.
- Boys, Kathryn A. & Florax, Raymond J.G.M., 2007. "Meta-Regression Estimates for CGE Models: A Case Study for Input Substitution Elasticities in Production Agriculture," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9683, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Truong, Truong P, 1985. "Inter-fuel and Inter-factor Substitution in NSW Manufacturing Industry," The Economic Record, The Economic Society of Australia, vol. 61(174), pages 644-53, September.
- Borges, Antonio M. & Pereira, Alfredo M., 1992. "Energy demand in Portuguese manufacturing: A two-stage model," Energy, Elsevier, vol. 17(1), pages 61-77.
- Ma, Hengyun & Oxley, Les & Gibson, John & Kim, Bonggeun, 2008.
"China's energy economy: Technical change, factor demand and interfactor/interfuel substitution,"
Elsevier, vol. 30(5), pages 2167-2183, September.
- John Gibson & Bongguen Kim & Hengyun Ma & Les Oxley, 2008. "China’s Energy Economy: Technical Change, Factor Demand and Interfactor/Interfuel Substitution," Working Papers in Economics 08/01, University of Canterbury, Department of Economics and Finance.
- Hengyun Ma & Les Oxley & John Gibson & Bongguen Kim, 2009. "China's Energy Economy: Technical Change, Factor Demand and Interfactor/Interfuel Substitution," Working Papers 09_02, Motu Economic and Public Policy Research.
- Renou-Maissant, Patricia, 1999. "Interfuel competition in the industrial sector of seven OECD countries," Energy Policy, Elsevier, vol. 27(2), pages 99-110, February.
- Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, November.
- Serletis, Apostolos & Shahmoradi, Asghar, 2008. "Semi-nonparametric estimates of interfuel substitution in U.S. energy demand," Energy Economics, Elsevier, vol. 30(5), pages 2123-2133, September.
- Uri, Noel D., 1982. "Energy demand and interfuel substitution in the United Kingdom," Socio-Economic Planning Sciences, Elsevier, vol. 16(4), pages 157-162.
- Turnovsky, Michelle & Folie, Michael & Ulph, Alistair, 1982. "Factor Substitutability in Australian Manufacturing with Emphasis on Energy Inputs," The Economic Record, The Economic Society of Australia, vol. 58(160), pages 61-72, March.
- Perkins, F. C., 1994. "A dynamic analysis of Japanese energy policies : Their impact on fuel switching and conservation," Energy Policy, Elsevier, vol. 22(7), pages 595-607, July.
- Agostini, Paola & Botteon, Michele & Carraro, Carlo, 1992. "A carbon tax to reduce CO2 emissions in Europe," Energy Economics, Elsevier, vol. 14(4), pages 279-290, October.
- Lakshmanan, T. R. & Anderson, W. & Jourabchi, M., 1984. "Regional dimensions of factor and fuel substitution in U.S. manufacturing," Regional Science and Urban Economics, Elsevier, vol. 14(3), pages 381-398, August.
- Pindyck, Robert S, 1979. "Interfuel Substitution and the Industrial Demand for Energy: An International Comparison," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 169-79, May.
- Suthep Buranakunaporn & Edward Oczkowski, 2007. "A dynamic econometric model of Thailand manufacturing energy demand," Applied Economics, Taylor & Francis Journals, vol. 39(17), pages 2261-2267.
- Urga, Giovanni, 1999. "An application of dynamic specifications of factor demand equations to interfuel substitution in US industrial energy demand," Economic Modelling, Elsevier, vol. 16(4), pages 503-513, December.
- Apostolakis, Bobby E., 1990. "Interfuel and energy-capital complementarity in manufacturing industries," Applied Energy, Elsevier, vol. 35(2), pages 83-107.
- Stern, David I., 1997. "Limits to substitution and irreversibility in production and consumption: A neoclassical interpretation of ecological economics," Ecological Economics, Elsevier, vol. 21(3), pages 197-215, June.
- Floros, Nikolaos & Vlachou, Andriana, 2005. "Energy demand and energy-related CO2 emissions in Greek manufacturing: Assessing the impact of a carbon tax," Energy Economics, Elsevier, vol. 27(3), pages 387-413, May.
- Morana, Claudio, 2000. "Modelling Evolving Long-Run Relationships: An Application to the Italian Energy Market," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(1), pages 72-93, February.
- Jones, Clifton T, 1995. "A Dynamic Analysis of Interfuel Substitution in U.S. Industrial Energy Demand," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(4), pages 459-65, October.
- Uri, Noel D., 1979. "Energy demand and interfuel substitution in India," European Economic Review, Elsevier, vol. 12(2), pages 181-190, April.
- Vlachou, A. S. & Samouilidis, E. J., 1986. "Interfuel substitution : Results from several sectors of the Greek economy," Energy Economics, Elsevier, vol. 8(1), pages 39-45, January.
- 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.
- Bousquet, Alain & Ladoux, Norbert, 2006.
"Flexible versus designated technologies and interfuel substitution,"
Elsevier, vol. 28(4), pages 426-443, July.
- Bousquet, Alain & Ladoux, Norbert, 2004. "Flexible versus Designated Technologies and Inter-Fuel Substitution," IDEI Working Papers 282, Institut d'Économie Industrielle (IDEI), Toulouse.
- T. D. Stanley, 2001. "Wheat from Chaff: Meta-analysis as Quantitative Literature Review," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 131-150, Summer.
- Fisher-Vanden, Karen & Jefferson, Gary H. & Liu, Hongmei & Tao, Quan, 2004. "What is driving China's decline in energy intensity?," Resource and Energy Economics, Elsevier, vol. 26(1), pages 77-97, March.
- Fuss, Melvyn A., 1977. "The demand for energy in Canadian manufacturing : An example of the estimation of production structures with many inputs," Journal of Econometrics, Elsevier, vol. 5(1), pages 89-116, January.
- Christopoulos, Dimitris K., 2000. "The demand for energy in Greek manufacturing," Energy Economics, Elsevier, vol. 22(5), pages 569-586, October.
- Hang, Leiming & Tu, Meizeng, 2007. "The impacts of energy prices on energy intensity: Evidence from China," Energy Policy, Elsevier, vol. 35(5), pages 2978-2988, May.
When requesting a correction, please mention this item's handle: RePEc:ags:eerhrr:94882. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.