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Industry-level Total-factor Energy Efficiency in Developed Countries

Satoshi Honma () and Jin-Li Hu ()

No 51, Discussion Papers from Kyushu Sangyo University, Faculty of Economics

Abstract: This study computes and analyzes the total-factor energy efficiency (TFEE) of 11 industries in 14 developed countries during the period of 1995-2005 using the data envelopment analysis (DEA) approach. There are four inputs: labor, capital stock, intermediate inputs other than energy, and energy. The value added is the only output. The most inefficient industry is the metal industry, which has an average TFEE of 40.6%. Australia is the most inefficient country, with the lowest weighted TFEE in every year except for 1996 and 1998. The most efficient countries are the United States from 1995 to 1998, Denmark from 1999 to 2002, and Netherlands from 2003 to 2005. Given that the number of efficient industries decreases over time, it is clear that most industries have room to improve their energy efficiency as time goes by. Moreover, based on the total-factor framework, this study finds no support for the convergence of energy efficiency levels.

Keywords: Data envelopment analysis (DEA); Total-factor energy efficiency; Industry-level analysis (search for similar items in EconPapers)
JEL-codes: Q40 Q30 Q32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff and nep-ene
Date: 2011-10
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