Measuring Energy Efficiency: An Application of Stochastic Frontier Production Function Analysis to Power Sector in Kerala

Vijayamohanan Pillai N.

MPRA Paper from University Library of Munich, Germany

Abstract: Traditionally, there are two basically reciprocal energy efficiency Indicators: one, in terms of energy intensity, that is, energy use per unit of activity output, and the other, in terms of energy productivity, that is, activity output per unit of energy use. The enquiry that has proceeded from the problems associated with this method of a single energy input factor in terms of productivity has led to multi-factor productivity analysis. We have here two approaches: parametric and non-parametric. Parametric approach famously includes two methods: the erstwhile popular total factor energy productivity analysis and the currently fanciful stochastic frontier production function analysis; The non-parametric approach is popularly represented by data envelopment analysis. The present paper is an attempt to measure efficiency in electrical energy consumption in Kerala, India. We apply the parametric method of stochastic frontier production function analysis on a panel data of the Kerala power sector with three sectors (Primary, Secondary and Tertiary) for the period from 1970-71 to 2016-17. For a comparative purpose, we also have a regression with a pooled data stochastic frontier. The results indicate that the sector-wise technical efficiency estimates of the Kerala power sector are independent of time, which can significantly refer to a technically stagnant situation in energy efficiency. The implication of the time-varying decay model, even though statistically insignificant, of a falling trend in the technical efficiency of all the three sectors also is a hot matter of serious concerns.

Keywords: Energy efficiency; Kerala; Power sector; Stochastic frontier; Technical efficiency. (search for similar items in EconPapers)
JEL-codes: C13 C51 Q4 (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-eff, nep-ene and nep-ore
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/101944/1/MPRA_paper_101944.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:101944

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().