Location of Repository

Technical and allocative inefficiencies and factor elasticities of substitution: An analysis of energy waste in Iran's manufacturing

By Nasser Khiabani and Karim Hasani

Abstract

Ignoring technical and allocative inefficiencies or embedding one of them alone in a system of input demands may result in biased elasticities. We consider a comprehensive model including technical inefficiency (in input and output forms) and allocative inefficiency and apply it to panel data from Iran's manufacturing sector. The results show that the presence of both inefficiencies affects the computed elasticities of demand and substitution. Moreover, in spite of current waste of energy in Iran's manufacturing, the elimination of environmental constraints will prompt the manufacturing firms to increase the utilization of energy relative to both capital and labor.Technical inefficiency Allocative inefficiency Shadow cost function Inappropriate environment Panel data

OAI identifier:
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://www.sciencedirect.com/s... (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.