Energy demand and fuel choices in the pulp and paper industry. [Using generalized market-share model]

Technical Report · Sun Oct 01 04:00:00 EDT 1978

DOI:https://doi.org/10.2172/6554211· OSTI ID:6554211

Chern, W. S.; Just, R. E.; Caudill, S. B.

This report presents a generalized market-share model in which the restrictive constraints on cross-price coefficients need not be imposed yet in which all demand elasticities are uniquely determined. The model is applied to estimating aggregate energy demand and fuel choices for the pulp and paper industry. The structural equations are estimated by a generalized least squares procedure using state-level census data for 1971 and 1974. The econometric results support the argument that price coefficients should not be constrained. Furthermore, the ''third-price'' coefficients are statistically significant in the fuel-split equations. The empirical results show that the aggregate demand for purchased boiler fuels in the paper industry is responsive to changes in energy prices. Also, the market shares of boiler fuels are highly dependent upon their prices; the own-price elasticities are all considerably greater than unity. These results, along with several large cross-price elasticities, suggest that the possibility of interfuel substitution is rather strong in the paper industry. The market share elasticities estimated in this study are used in the economic/engineering simulation model of energy use in the paper industry being developed at the Oak Ridge National Laboratory for the Department of Energy.

• Research Organization: Oak Ridge National Lab., TN (USA)
• DOE Contract Number: W-7405-ENG-26
• OSTI ID: 6554211
• Report Number(s): ORNL/CON-33
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290100 -- Energy Planning & Policy-- Energy Analysis & Modeling
292000 -- Energy Planning & Policy-- Supply
Demand & Forecasting
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320301* -- Energy Conservation
Consumption
& Utilization-- Industrial & Agricultural Processes-- Energy Sources
DEMAND FACTORS
ECONOMETRICS
ECONOMIC ELASTICITY
ECONOMICS
ENERGY CONSERVATION
ENERGY CONSUMPTION
ENERGY DEMAND
ENERGY MODELS
FUEL SUBSTITUTION
FUELS
INDUSTRY
MARKET
NATIONAL ORGANIZATIONS
ORNL
PAPER INDUSTRY
SIMULATION
US AEC
US DOE
US ERDA
US ORGANIZATIONS
WOOD PRODUCTS INDUSTRY