earticle

영어

This paper presents results of a Zellner's SURE-regression analysis on empirical estimates of imported and domestic energy substitution in Korea Steel Industy. Theoretically it is clear that a distinction should be made between Morishima substitution elasticities and cross-price elasticities. The former represent purely technical substitution possibilities while the latter include an income effect and therefore represent economic substitution potential. I estimate a Zellner's SURE-regression model with separate coefficients for the Korean Steel industry. My findings suggest that primary model assumptions on returns to scale, technological change and separability of input factors matter for the outcome of a primary study. Aggregation of variables and the type of data used in empirical research are also relevant sources of systematic effect-size variation. Taking these factors into consideration, I compute ideal-typical elasticities for the energy demand. The resulting figures clearly show that substitution elasticities are substantially higher than cross price elasticities. Therefore, despite considerable technical opportunities for imported and domestic energy substitution, the cross price elasticities are not statistically different from zero.