Panel Data Parametric Frontier Technique for Measuring Total-factor Energy Efficiency: Application to Japanese Regions

Honma, Satoshi and Hu, Jin-Li (2014): Panel Data Parametric Frontier Technique for Measuring Total-factor Energy Efficiency: Application to Japanese Regions.

Abstract

Using the stochastic frontier analysis (SFA) model, we estimate total-factor energy efficiency (TFEE) scores for 47 regions across Japan during 1996–2008. We extend the cross-sectional SFA model proposed by Zhou et al. (Applied Energy, 2012) to panel data models and add environmental variables. The results provide not only the TFEE scores, in which statistical noise is taken into account, but also the determinants of inefficiency. The three SFA TFEEs are compared with a TFEE derived from data envelopment analysis (DEA). The four TFEEs are highly correlated with one another. For the inefficiency estimates, the higher the manufacturing industry share and wholesale and retail trade share, the lower the TFEE score.

• Item Type: MPRA Paper
• Language: English
• Keywords: Stochastic frontier analysis (SFA), Data envelopment analysis (DEA), Total-factor energy efficiency (TFEE), Panel data, Shephard distance functions
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R15 - Econometric and Input-Output Models ; Other Models

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