Econometric investigation of interfactor and interfuel substitution possibilities in the Korean industrial and residential sectors: a translog function approach

Thesis/Dissertation · Wed Jan 01 04:00:00 EST 1986

OSTI ID:7051345

Kim, B C

The objective of this dissertation is two fold: (1) to investigate the long-run sensitivities of energy demand to price changes, and the degree of interfactor and interfuel substitution possibilities in the Korean industrial and residential sectors; and (2) to examine in what way and to what extent the energy aspects conflict with overall development objectives in Korea. Unlike other energy demand studies, the industrial sector is further disaggregated into nine manufacturing and three non-manufacturing subsectors. For the model specification, a translog cost share function is adopted. The interfactor substitution model includes capital, labor, and energy inputs. Under the weak separability assumptions, energy input is further disaggregated into coal, oil, and electricity. The results are as follows: (1) Energy and capital are weak substitutes in the energy intensive manufacturing subsectors. In contrast, energy and labor are complements. Very few of the estimated elasticities exceed one. (2) Coal is capable of replacing oil and electricity in the industrial sector, while oil and electricity are complements. (3) Based on the structure-intensity analysis, changes in industrial structure over the past two decades worked in favor of industries with more energy intensive production. Therefore, formulation of future energy demand management policy should be two dimensional: restructuring of the industrial mix with more emphasis on improvement of energy use efficiency; and changes in the traditional energy pricing policy.

• Research Organization: West Virginia Univ., Morgantown (USA)
• OSTI ID: 7051345
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
292000 -- Energy Planning & Policy-- Supply
Demand & Forecasting
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320100 -- Energy Conservation
Consumption
& Utilization-- Buildings
320301* -- Energy Conservation
Consumption
& Utilization-- Industrial & Agricultural Processes-- Energy Sources
ASIA
CAPITAL
DEMAND
DEVELOPING COUNTRIES
ECONOMIC DEVELOPMENT
ECONOMIC ELASTICITY
ECONOMIC IMPACT
EFFICIENCY
ENERGY DEMAND
ENERGY EFFICIENCY
ENERGY EXPENSES
FUEL SUBSTITUTION
INDUSTRY
LABOR
REPUBLIC OF KOREA
RESIDENTIAL SECTOR
SENSITIVITY ANALYSIS