Energy prices and the adoption of energy-saving technology
Author(s)
Linn, Joshua
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Other Contributors
Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research.
Metadata
Show full item recordAbstract
This paper investigates the link between factor prices, technology and factor demands. I estimate the effect of price-induced technology adoption on energy demand in the U.S. manufacturing sector, using plant data from the Census of Manufactures, 1963-1997. I compare the energy efficiency of entrants and incumbents to measure the effect of technology adoption on the demand for energy. A 10 percent increase in the price of energy causes technology adoption that reduces the energy demand of entrants by 1 percent. This elasticity has two implications: first, technology adoption explains a statistically significant but relatively small fraction of changes in energy demand in the 1970s and 1980s; and second, technology adoption can reduce the long run effect of energy prices on growth, but by less than previous research has found.
Date issued
2006Publisher
MIT Center for Energy and Environmental Policy Research
Other identifiers
2006-012
Series/Report no.
MIT-CEEPR (Series) ; 06-012WP.