Template-Type: ReDIF-Article 1.0
Author-Name:  Abbas A. Taheri 
Author-Name:  Rodney Stevenson
Title:  Energy Price, Environmental Policy, and Technological Bias
Classification-JEL: F0
Pages:  85-107
Volume:  Volume23
Issue:  Number 4
Year:  2002
Abstract:  This paper investigates input biasing characteristics of technology, environmental compliance, and changing energy prices. In particular we wish to investigate whether input biases of technology and environmental compliance are induced by changes in relative fuel prices, or whether there are price induced technology and environmental compliance biases. Using a two-stage optimization, we estimate a truncated third-order translog model by its associated (second order) cost share equations. The model uses two-digit SIC data panel for the period 1974-- 1991. We find evidence of significant fuel-saving technological bias, while environmental compliance has been significantly fossil fuel using. The results indicate that technology and environmental compliance biases are, in part, induced by changes in relative fuel prices and such induced biases are mainly fuel saving. Finally, our demand elasticity estimates indicate that industrial demand for most fossil fuels and purchased electricity is significantly price inelastic. Policy implications of these results are also briefly discussed.
Handle: RePEc:aen:journl:2002v23-04-a04
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=1398
File-Format: text/html
File-Restriction: Access to full text is restricted to IAEE members and subscribers.