Monday, November 7, 2011

6. The Energy Cost Share Declines Over Time

This fact is at the moment only supported by the data from Sweden and so isn't much of a fact. In Sweden the share of costs represented by energy use has declined over time:



It seems that this might be a general phenomenon. I have seen references elsewhere to a declining income share for land too. The implication is that the elasticity of substitution between energy and other inputs is different from unity. Stern and Kander show it to be about 0.65 in Sweden.

1 comment:

  1. So why do your colleagues at the Crawford School want to reverse this trend?

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