Energy Efficiency of the Baltic Sea Countries: An Application of Stochastic Frontier Analysis

Wen-Ling Hsiao, Jin-Li Hu (), Chan Hsiao and Ming-Chung Chang ()
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Wen-Ling Hsiao: Department of Management Science, National Chiao Tung University, Hsinchu City 300, Taiwan
Chan Hsiao: Department of Management Science, National Chiao Tung University, Hsinchu City 300, Taiwan

Energies, 2018, vol. 12, issue 1, 1-11

Abstract: Using the stochastic frontier analysis (SFA) model, this research measures total-factor energy efficiency (TFEE) and disaggregate input efficiency for 10 countries across the Baltic Sea from 2004 to 2014. Real capital, labor, energy use, and carbon dioxide (CO 2 ) are input variables, real gross domestic product (GDP) is the output variable, and renewable energy consumption and urban population are the environmental variables. The results provide not only the TFEE scores, in which statistical noise is considered, but also the determinants of inefficiency, which show the following. (i) Norway, Sweden, Finland, and Latvia perform better with respect to energy efficiency than other countries in the Baltic Sea Region. (ii) Interestingly, the average energy use efficiency scores from 2004 to 2014 in the 10 Baltic countries exhibit a gradual upward trend except for 2009. (iii) For the inefficiency estimates, higher renewable energy consumption and urban population correspond to higher TFEE scores.

Keywords: stochastic frontier analysis (SFA); total-factor energy efficiency (TFEE); distance functions; Baltic Sea region (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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