Modeling Energy and Non-energy Substitution – A Survey of Elasticities

Arbeitspapier

Estimating the degree of substitution between energy and non-energy inputs is key for any evaluation of environmental and energy policies. Yet, given the large 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 also highlights the fact that cross-price elasticities are their essential ingredients.

Object Details

• ISBN: 978-3-86788-298-9
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Ruhr Economic Papers ; No. 256

Classification and Topics

• Classification: Wirtschaft
• Subject: Cross-price elasticities ; Allen partial elasticities ; Morishima elasticities ; Energiesubstitution ; Substitutionselastizität ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Frondel, Manuel
• Event: Veröffentlichung
• (who): Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
• (where): Essen
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/45905
• Last update: 12.03.0003, 8:04 PM CET