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How large is the economy-wide rebound effect in middle income countries? Evidence from Iran

Author

Listed:
  • Mahboubeh Jafari

    (Department of Economics, Shiraz University, Shiraz, Iran)

  • David I. Stern

    (Crawford School of Public Policy, Australian National University)

  • Stephan B. Bruns

    (Centre for Environmental Sciences, University of Hasselt, Belgium and Department of Economics, University of G ttingen, Germany)

Abstract

The issue of whether energy efficiency improvements will lower energy use or not is contentious. We estimate the economy-wide rebound effect for Iran using a structural vector autoregressive model estimated with quarterly data from 1988:3 to 2018:1. The structural shocks are identified by independent component analysis, a statistical identification technique that does not require us to impose restrictions based on economic theory on the model. The results show that in response to an energy efficiency shock energy use falls initially, but returns to near its original level over time. The economy-wide rebound effect in Iran is 84% after 6 years and its confidence interval includes 100% implying that policies that encourage energy efficiency innovation will have limited longterm impact on energy use.

Suggested Citation

  • Mahboubeh Jafari & David I. Stern & Stephan B. Bruns, 2021. "How large is the economy-wide rebound effect in middle income countries? Evidence from Iran," CCEP Working Papers 2107, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:ccepwp:2107
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Annual Review 2022
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2022-12-18 02:45:00

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    Cited by:

    1. Tan, Ruipeng & Zhang, Zixuan & Du, Kerui & Lin, Boqiang, 2025. "Energy rebound effect in China: Measurement based on a variable coefficient production function," Ecological Economics, Elsevier, vol. 230(C).
    2. Chang, Lei & Mohsin, Muhammad & Hasnaoui, Amir & Taghizadeh-Hesary, Farhad, 2023. "Exploring carbon dioxide emissions forecasting in China: A policy-oriented perspective using projection pursuit regression and machine learning models," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    3. Huang, Chenchen & Lin, Boqiang, 2025. "The impact of digital economy on energy rebound effect in China: A stochastic energy demand frontier approach," Energy Policy, Elsevier, vol. 196(C).
    4. Mustafa NaimoÄŸlu & Ä°smail Kavaz, 2023. "Energy use tendencies in a resource-abundant country: the case of Canada," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 5(4), pages 65-79, December.
    5. Xu, Mengmeng & Chen, Can & Zhou, Xiaoshi, 2024. "Enhancing understanding of rebound effect: A novel varying coefficient model for China's industrial sector," Energy, Elsevier, vol. 313(C).

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