Energy quality

Stern, David I. (2009): Energy quality.

Abstract

This paper develops economic definitions of energy quality for individual fuels and energy aggregates. There are both use- and exchange-value concepts as well as marginal and total measures of energy quality. A factor augmentation or quality coefficients approach corresponds to the use-value definition while indicators based on distance functions and relative prices are exchange-value based definitions. These indicators are identical when the elasticity of substitution between fuels is infinity but diverge or cannot be computed for other interfuel elasticities of substitution. Under zero substitutability only the quality coefficients approach is defined. I also find that the ratio of an energy volume index to aggregate joules cannot be considered a complete indicator of aggregate energy quality as it does not account for quality changes in the component fuels.

• Item Type: MPRA Paper
• Language: English
• Keywords: Energy; Quality; Productivity
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q40 - General; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

References

Abowd, J. M., Kramarz, F., Moreau A., 1996. Product quality and worker quality. Annales d’Economie et de Statistique 41-42, 299-322.

Acemoglu, D., 2000. Labor- and Capital- Augmenting Technical Change. NBER Working Paper 7544.

Ayres, R. U., Warr, B., 2005. Accounting for growth: The role of physical work. Structural Change and Economic Dynamics 16(2), 181-209

Berndt, E. R., 1978. Aggregate energy, efficiency, and productivity measurement. Annual Review of Energy 3, 225-273.

Cleveland, C. J., Stern, D. I., 1993. Productive and exchange scarcity: an empirical analysis of the U.S. forest products industry. Canadian Journal of Forest Research 23, 1537-1549.

Cleveland, C. J., Kaufmann, R. K., Stern, D. I., 2000. Aggregation and the role of energy in the economy. Ecological Economics 32, 301-318.

Commons, J. R., 1934. Institutional Economics. New York, Macmillan.

Giannias, D. A., 1998. Labour quality and wage differentials. Scottish Journal of Political Economy 45(2), 188-197.

Hanushek, E. A., Kimko, D. D., 2000. Schooling, labor-force quality, and the growth of nations. American Economic Review 90(5), 1184-1208.

Harvey, A. C., 1989. Forecasting, Structural Time Series Models, and the Kalman Filter. Cambridge, Cambridge University Press.

Harvey, A. C., Marshall, P., 1991. Inter-fuel substitution, technical change and the demand for energy in the UK economy. Applied Economics 23, 1077-1086.

Hirschleifer, J., Hirschleifer, D., 1997. Price Theory and Applications. 6th edition, Prentice Hall, Upper Saddle River NJ.

Ho, M. S., Jorgenson, D. W., 1999. The Quality of the U.S. Work Force, 1948-95. Kennedy School of Government, Harvard University, Cambridge, MA.

Hunt, L. C., Lynk, E. L., 1993. The interpretation of coefficients in multiplicative-logarithmic functions. Applied Economics 25, 735-738.

Jorgenson, D. W., Griliches, Z., 1967. The explanation of productivity change. Review of Economic Studies 34, 249-283.

Jorgenson, D. W., Ho, M. S., Stiroh, K. J., 2003. Lessons from the US growth resurgence. Journal of Policy Modeling 25(5), 453-470.

Kander, A., 2002. Economic Growth, Energy Consumption and CO2 Emissions in Sweden 1800-2000. Lund Studies in Economic History, 19, University of Lund, Lund.

Kazamaki-Ottersten, E., Lindh, T., Mellander, E., 1999. Evaluating firm training, effects on performance and labour demand. Applied Economics Letters 6, 431-437.

Mankiw, N. G., Romer, D., Weil, D. N., 1992. A contribution to the empirics of economic growth. The Quarterly Journal of Economics 107, 407-437.

Mellander, E., 2000. The Multi-Dimensional Nature of Labor Demand and Skill-Biased Technical Change. Research institute of industrial Economics, Stockholm, Sweden.

Padilla, S. B., Mayer, H. P., 2003. Sources of Growth in Selected Central and Eastern European Countries. bP&Mayer Consultants, Ljubljana.

Pirsig, R. M., 1974. Zen and the Art of Motorcycle Maintenance. William Morrow.

Stern, D. I., 1999. Use value, exchange value, and resource scarcity. Energy Policy 27, 469-476.

Stern, D. I., 2009. Interfuel substitution: A meta-analysis. Munich Personal RePEc Archive 15792.

Tallman, E. W. and Wang, P., 1994. Human capital and endogenous growth: Evidence from Taiwan. Journal of Monetary Economics 34, 101-124.

Turvey, R., Nobay, A. R., 1965. On measuring energy consumption. The Economic Journal 75, 789-793.