 Fuel conserving (and using) production functionsHarry D. Saunders Energy Economics, 2008, vol. 30, issue 5, 2184-2235 Abstract: This article compares eight production/cost functions used or potentially useful for exploring how energy efficiency gains affect energy consumption. We show the practitioner's choice of function can inadvertently pre-determine results, and make recommendations as to which functions are flexible enough to prevent this. We also show pre-selected factor substitution elasticities can similarly pre-determine results. To aid the comparison we decompose the energy consumption "rebound" effect into intensity and output/income effects, which also delivers insight into the mechanisms of rebound. We conclude by recommending practitioners restrict themselves to either the Gallant (Fourier) or the Generalized Leontief/Symmetric Generalized Barnett cost functions as being sufficiently "rebound flexible." The Translog cost function may be suitable given certain conditions and a particular form of the CES (Solow) function is a possible, but problematic, candidate. Along the way, the article provides a general methodology for similarly examining any arbitrarily-defined constant returns to scale production or cost function. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:30:y:2008:i:5:p:2184-2235 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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