Energy use in United States manufacturing: the case for non-separability of the inputs
Previous research in the field of energy use in the manufacturing sector of te US economy has focused on the traditional inputs of capital, labor, and energy. This aggregate commodity lumps together substitutable sources of energy such as coal, oil, and natural gas. This paper is an attempt to test the strength of the property of separability in flexible functional form demand models for energy use in US manufacturing. The model chosen for use in this study is the transcendental logarithmic (translog) unit cost function coupled with the use of duality theory. The data incorporated in the analysis are from the US Census of Manufactures, 1972, and various Annual Surveys of Manufactures. Data are available for the year 1971 on the capital, labor, coal, oil, and natural gas inputs by four-digit Standard Industrial Classification (SIC) codes. Modeling is done at the two-digit SIC code level to preserve homogeneity. Three results fall out of the analysis. First, the own- and cross-price elasticities of capital, labor, oil, and natural gas are estimated. Second, the substitution elasticities of these inputs are estimated. Third, the results allow for testing of energy separability and, subsequently, the use of a consistent energy aggregator in modeling. Separability is overwhelmingly rejected as a plausible assumption. The results of this study are meaningful in that studies which analyze energy trends under the assumption of separability are rendered suspect.
- OSTI ID:
- 6754292
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
298000 -- Energy Planning & Policy-- Consumption & Utilization
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320300* -- Energy Conservation
Consumption
& Utilization-- Industrial & Agricultural Processes
CAPITAL
ENERGY CONSUMPTION
ENERGY SOURCES
ENERGY SUBSTITUTION
LABOR
MANUFACTURING
NORTH AMERICA
USA