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Production function with electricity consumption and its applications

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  • Hu, Zheng
  • Hu, Zhaoguang

Abstract

Researchers have tried to track the pattern of economy activities for decades. Cobb–Douglas production function has been adopted for almost one hundred years, while modern economists tend to analyze the economy via the aspect of individual agents. A different perspective of reviewing Cobb–Douglas function is needed. This paper finds a closer relationship between electricity consumption and economy, which can be represented via a strong similarity between four characteristics of “genes”. A second finding is that countries after post-industrialization should enter the phase of up-industrialization, which largely focuses on technology accumulated value added for the secondary industry. Case study in this paper illustrates that the U.S. is entering the up-industrialization period. Countries that deemphasize on technology innovations will sooner or later result in severe economic consequences or financial crisis. This paper also initially encourages the wide application of smart meters and integration of smart grid to obtain timely and accurate data of electricity consumption to observe unusual economic activities.

Suggested Citation

  • Hu, Zheng & Hu, Zhaoguang, 2013. "Production function with electricity consumption and its applications," Energy Economics, Elsevier, vol. 39(C), pages 313-321.
    • Handle: RePEc:eee:eneeco:v:39:y:2013:i:c:p:313-321
    DOI: 10.1016/j.eneco.2013.03.007
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    Cited by:

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    2. Min, Jeoung-Sik & Lim, Seul-Ye & Yoo, Seung-Hoon, 2019. "Economic output-maximizing share of combined heat and power generation: The case of South Korea," Energy Policy, Elsevier, vol. 132(C), pages 1087-1091.
    3. Radpour, S. & Gemechu, E. & Ahiduzzaman, Md & Kumar, A., 2021. "Developing a framework to assess the long-term adoption of renewable energy technologies in the electric power sector: The effects of carbon price and economic incentives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).
    4. Andrzej Pacana & Karolina Czerwińska & Grzegorz Ostasz, 2023. "Analysis of the Level of Efficiency of Control Methods in the Context of Energy Intensity," Energies, MDPI, vol. 16(8), pages 1-26, April.
    5. Gyeong-Sam Kim & Hyo-Jin Kim & Seung-Hoon Yoo, 2019. "Optimal Share of Natural Gas in the Electric Power Generation of South Korea: A Note," Sustainability, MDPI, vol. 11(13), pages 1-6, July.
    6. Cheng Maolin & Shi Guojun & Han Yun, 2019. "A Modified CES Production Function Model and Its Application in Calculating the Contribution Rate of Energy and Other Influencing Factors to Economic Growth," Journal of Systems Science and Information, De Gruyter, vol. 7(2), pages 161-172, April.
    7. Radpour, Saeidreza & Hossain Mondal, Md Alam & Kumar, Amit, 2017. "Market penetration modeling of high energy efficiency appliances in the residential sector," Energy, Elsevier, vol. 134(C), pages 951-961.
    8. Sergey Baranov & Tatiana Skufina & Vera Samarina, 2023. "Influence of Underutilization of Production Capacities on the Dynamics of Russian GDP: An Assessment on the Basis of Production Functions," JRFM, MDPI, vol. 16(3), pages 1-10, March.

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    More about this item

    Keywords

    Production function with electricity consumption; Gene-like E-GDP characteristics; Up-industrialization;
    All these keywords.

    JEL classification:

    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General

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