<p>A problem with using energy <em>service</em> prices is that they might reflect competition conditions (e.g. monopoly/oligopoly, or the <a href="https://en.wikipedia.org/wiki/Big_Six_energy_suppliers" rel="nofollow noreferrer">big six</a> in the UK) rather than the true cost of energy to firms. </p>

<p>A problem with using energy prices is that they might reflect demand and supply issues. For example, no one would say that the drop in oil prices from 140 to 50 was due to technological improvement. Instead, it was driven by a shale oil revolution, and perhaps geopolitical aspects.</p>

CC BY-SA 3.0
2017-08-10T20:35:33.180Z
Thanks. I should have made it clear, the data is for a period of few decades in the 19th century. Also, not energy prices as noted above, I am considering energy service prices only.
london
CC BY-SA 3.0
2017-08-23T12:16:24.477Z
@london let me know if there is something else I can add to my answer. This is an interesting area and a common issue when working with measuring/proxying technological change.
luchonacho
CC BY-SA 3.0
2017-08-24T17:32:46.480Z
I am still looking for a measure of energy saving technologies. Highly appreciate your help!
london
CC BY-SA 3.0
2017-08-25T08:31:59.227Z
@london So you want to run a growth accounting exercise, where you regress output (or the "Solow residual") into a series of factors, including energy saving technology? Is there an underlying model that you have about it? Why would energy-saving technology increase output?
luchonacho
CC BY-SA 3.0
2017-08-26T10:32:47.547Z
Long story is, I want to evaluate a set of growth determinants in a cointegration model within a production function framework. So variables include capital stock, labour and energy as well as annual patent counts for 300 years to proxy for innovative activity or technical change. In log log form, assuming a cobb-douglass framework, I should be able to estimate output elasticities of each variable. However, I want to pin down the effects of energy saving technical change along with the labour saving technical change. Where can I get data for energy saving technichal change
london
CC BY-SA 3.0
2017-08-26T10:33:11.173Z
I could use deterministic trend in the equation for labour-saving technical change, and was thinking of including energy service prices to proxy for energy saving technical chnage.
london
CC BY-SA 3.0
2017-08-26T17:50:03.740Z
@london Interesting. But how can you differentiate between different forms of technical change in a Cobb-Douglas form, where basically all technical change is ultimatelly Hicks-neutral?
luchonacho
CC BY-SA 3.0
2017-08-29T13:10:31.120Z
Ineed, but what I want is a measure of labour and energy augmentation indices. The idea is simple, with little theoretical underpinnings. The cointegration equation could be written as $Y=Al+Ae+aK+bL+cE$. Ignore all the usual indices. You may think of this equation as an augmented cobb douglass. $Al$-labour augmentation index. $Ae$-energy augmentation index.
london
CC BY-SA 3.0
2017-08-10T18:59:45.693Z
2017-08-10T18:59:45.693Z
luchonacho
<p>I want to assess the effects of energy saving technologies on output growth using time series data. My work would benefit from time series data on patents for energy saving innovations, but this is hard to find. I have time series data on energy service prices (not energy prices), which I am thinking of using as a proxy for energy saving technologies. Energy service prices appear to have declined over time and this is due to the improvement in energy technologies, mainly. Thus, I assume the energy service price data reflects the improvements in energy technologies.</p>

<p>Do you think the idea of proxying energy technologies with energy service prices is appropriate in an empirical analysis? </p>

<p>Edit: Price of energy refers to the price of energy carrier, say oil. Energy service price refers to the cost of providing an energy service, say heating or lighting etc.</p>

<macroeconomics><technology><energy-economics><directed-technical-change>
Energy saving technology and energy service price
london
# Energy saving technology and energy service price

(Asked by: username_0 on 2017-08-10)

I want to assess the effects of energy saving technologies on output growth using time series data. My work would benefit from time series data on patents for energy saving innovations, but this is hard to find. I have time series data on energy service prices (not energy prices), which I am thinking of using as a proxy for energy saving technologies. Energy service prices appear to have declined over time and this is due to the improvement in energy technologies, mainly. Thus, I assume the energy service price data reflects the improvements in energy technologies.

Do you think the idea of proxying energy technologies with energy service prices is appropriate in an empirical analysis?

Edit: Price of energy refers to the price of energy carrier, say oil. Energy service price refers to the cost of providing an energy service, say heating or lighting etc.

**Tags:** macroeconomics, technology, energy-economics, directed-technical-change


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## 1 answers

### Answer by username_1 on 2017-08-10. Score: 2 | Accepted answer

A problem with using energy *service* prices is that they might reflect competition conditions (e.g. monopoly/oligopoly, or the [big six](https://en.wikipedia.org/wiki/Big_Six_energy_suppliers) in the UK) rather than the true cost of energy to firms.

A problem with using energy prices is that they might reflect demand and supply issues. For example, no one would say that the drop in oil prices from 140 to 50 was due to technological improvement. Instead, it was driven by a shale oil revolution, and perhaps geopolitical aspects.

> **Comments:**
> **username_0**: Thanks. I should have made it clear, the data is for a period of few decades in the 19th century. Also, not energy prices as noted above, I am considering energy service prices only.  
> **username_1**: @username_0 let me know if there is something else I can add to my answer. This is an interesting area and a common issue when working with measuring/proxying technological change.  
> **username_0**: I am still looking for a measure of energy saving technologies. Highly appreciate your help!  
> **username_1**: @username_0 So you want to run a growth accounting exercise, where you regress output (or the "Solow residual") into a series of factors, including energy saving technology? Is there an underlying model that you have about it? Why would energy-saving technology increase output?  
> **username_0**: Long story is, I want to evaluate a set of growth determinants in a cointegration model within a production function framework. So variables include capital stock, labour and energy as well as annual patent counts for 300 years to proxy for innovative activity or technical change. In log log form, assuming a cobb-douglass framework, I should be able to estimate output elasticities of each variable. However, I want to pin down the effects of energy saving technical change along with the labour saving technical change. Where can I get data for energy saving technichal change  
> **username_0**: I could use deterministic trend in the equation for labour-saving technical change, and was thinking of including energy service prices to proxy for energy saving technical chnage.  
> **username_1**: @username_0 Interesting. But how can you differentiate between different forms of technical change in a Cobb-Douglas form, where basically all technical change is ultimatelly Hicks-neutral?  
> **username_0**: Ineed, but what I want is a measure of labour and energy augmentation indices. The idea is simple, with little theoretical underpinnings. The cointegration equation could be written as $Y=Al+Ae+aK+bL+cE$. Ignore all the usual indices. You may think of this equation as an augmented cobb douglass. $Al$-labour augmentation index. $Ae$-energy augmentation index.  

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