Dynamic Estimation on Inter-Fuel Substitution Elasticity in China＇ s Manufacturing Sector
Based on a system of dynamic equations, the authors of this paper study the inter-fuel substitution of China＇ s manufacturing sector in a period when the sector develops rapidly and energy prices are skyrocketing. It is found that in the short run the manufacturing sector can only adjust the actual energy consumption to a half of the long run desired consumption. The demand elasticity and substitution elasticity are calculated for substitutions between the petroleum, coal, and electricity both in the short run and the long run. The results suggest that the sector has substantial responsiveness to petroleum prices in the long run, though in the short run the petroleum demand is inelastic. In contrast, the demand for coal and electricity is unresponsive even in the long run. The aggregated energy demand elasticity with respect to coal and electricity prices is negative, but positive to petroleum price. Therefore regulators could dampen the petroleum price while deregulating the coal and electricity prices in order to reduce the aggregate energy demand in the sector. It is also discovered that the sector could substitute coal and electricity for petroleum when the latter＇s price increases both in the short run and the long run. However, the substitution effects between coal and electricity are relatively weak.
manufacturing sectorenergy demandenergy substitutionelasticity of demandelasticity of substitutiondynamic estimation
NETL
NSTL
万方数据
维普
