Econometric estimation of nested production functions and testing in a computable general equilibrium analysis of economy-wide rebound effects

Karen Turner, Ian Lange, Patrizio Lecca, Soo Jung Ha

Research output: Chapter in Book/Report/Conference proceedingConference contribution book

Abstract

Quantitative models, such as computable general equilibrium (CGE), that are increasingly used to inform policy processes rely on a number of assumptions concerning how good and services are produced. Previous research has shown that the elasticity of substitution between inputs and the structure in which these inputs interact can have large impacts on model output. However, the choice of elasticities and production structure is often made without the support of statistical evidence. This research aims to address these points by estimating nesting structure and the elasticities of substitution therein across a number of sectors in the UK then testing the implications of introducing these estimates to parameterise a CGE model that is then used to simulation the economy-wide impacts of increased efficiency in the productive use of energy.
Original languageEnglish
Title of host publication5th International Workshop on Empirical Methods in Energy Economics
Publication statusPublished - 7 Jun 2012
Event5th International Workshop on Empirical Methods in Energy Economics - DIW Berlin, Berlin, United Kingdom
Duration: 7 Jun 20128 Jun 2012
http://www.uni-potsdam.de/wipo/events.html

Conference

Conference5th International Workshop on Empirical Methods in Energy Economics
CountryUnited Kingdom
CityBerlin
Period7/06/128/06/12
Internet address

Keywords

  • general equilibrium
  • KLEM production function
  • separability assumptions
  • computable general equilibrium
  • elasticity of substitution
  • estimating nesting structure
  • energy efficiency

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