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Estimating the Capital-Energy Substitution Elasticity in I.R. Iran Chemical Industry
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Sayed Ali Sobhanisabet *   , Davood Manzoor |
| , sobhanisabet@isu.ac.ir |
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Abstract: (6821 Views) |
| This paper examines elasticity of substitution among electricity, other energy materials and capital in IR. Iran chemical industry, using time series data between (1998-2007). This analysis uses Tran slog production and cost functions due to their economic properties and production inputs are categorized into four categories including capital, labor, electricity and other energy materials. This production function were used to estimate the own, cross price, Morishima and Alen elasticity. The Morishima elasticity for capital-electricity estimated 1.588 and Alen elasticity for capital and other materials estimated 0.698. Cross elasticity between electricity and other materials was equal to (-1.363). So that the results of this paper indicate that capital, electricity and labor substitute each other. But electricity and other energy materials are found to be complements. |
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| Keywords: Substitution of Capital and Energy, Allen Elasticity, Morishima Elasticity, System of Simultaneous Equations. |
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Type of Study: Research |
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Sobhanisabet S A, manzoor D. Estimating the Capital-Energy Substitution Elasticity in I.R. Iran Chemical Industry. qjerp 2014; 22 (71) :157-172 URL: http://qjerp.ir/article-1-461-en.html
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