Multilevel index decomposition analysis: Approaches and application

X.Y. Xu and B.W. Ang ()

Energy Economics, 2014, vol. 44, issue C, 375-382

Abstract: With the growing interest in using the technique of index decomposition analysis (IDA) in energy and energy-related emission studies, such as to analyze the impacts of activity structure change or to track economy-wide energy efficiency trends, the conventional single-level IDA may not be able to meet certain needs in policy analysis. In this paper, some limitations of single-level IDA studies which can be addressed through applying multilevel decomposition analysis are discussed. We then introduce and compare two multilevel decomposition procedures, which are referred to as the multilevel-parallel (M-P) model and the multilevel-hierarchical (M-H) model. The former uses a similar decomposition procedure as in the single-level IDA, while the latter uses a stepwise decomposition procedure. Since the stepwise decomposition procedure is new in the IDA literature, the applicability of the popular IDA methods in the M-H model is discussed and cases where modifications are needed are explained. Numerical examples and application studies using the energy consumption data of the US and China are presented.

Keywords: Index decomposition analysis; Multilevel decomposition analysis; Multi-hierarchical model; Energy intensity; Structure change (search for similar items in EconPapers)
JEL-codes: C43 Q43 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:44:y:2014:i:c:p:375-382

DOI: 10.1016/j.eneco.2014.05.002

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