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A micro-data analysis of fuels' factor demand. The case of Chilean manufacturing sector

Helena Cardenas ()
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Helena Cardenas: University of Concepción

No 201462, Working Papers from Latin American and Caribbean Environmental Economics Program

Abstract: This study analyzes price elasticities of fuels demand in the Chilean manufacturing sector at the establishment (plant) level and for portfolios of different fuels. The findings suggest that most fuels used in Chilean manufacturing firms have low levels of substitutability. In terms of own price elasticities, electricity is the most inelastic, while gas and gasoline are the most elastic. Results show that micro-data estimations differ by fuel portfolio: some results are lower than aggregate estimations, while others are higher. Conditional factor demands are estimated through the linear logit functional form, which employs multi-equation static panel techniques with seemingly unrelated regression and maximum likelihood estimation.

Pages: 34 pages
Date: 2014, Revised 2014
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