Separating the Changing Composition of U.S. Manufacturing Production from Energy Efficiency Improvements: A Divisia Index Approach

Abstract

The demand for energy is normally broken down into five sectors: industry, utilities, the residential sector, the commercial sector, and transportation. Industry is the most heterogeneous of these with manufacturing accounting for about 80 percent of total industrial energy demand. Manufacturing is itself a very heterogeneous collection of production activities. As defined by the Standard Industrial Classification (SIC) method of the U.S. Department of Commerce, there were 448 manufacturing sectors in 1972.

Why Did the Energy Intensity Fall in China's Industrial Sector in the 1990s? The Relative Importance of Structural Change and Intensity Change

“…Studies that employed either of the two methods include Ang and Lee (1994), Boyd et al (1987), Boyd et al (1988), Howarth et al (1991), and Liu et al (1992). Howarth et al (1991) show that the two methods of decomposing manufacturing energy use in eight OECD countries yield very similar results in terms of the relative importance of the driving force of aggregate energy intensity declines.…”

Changes in energy efficiency in Australia: A decomposition of aggregate energy intensity using logarithmic mean Divisia approach

“…Boyd et al(1987) proposed the Divisia index approach in energy decomposition analysis, where the index is defined as a weighted average of logarithmic growth rates.…”

Decomposing the drivers of aviation fuel demand using simultaneous equation models

“…The impact of a specific component is determined by changing that component, while keeping others constant. On the other hand, Divisia indices, first introduced by Boyd et al (1987), are based on logarithmic changes and offer some theoretical advantages over Laspeyer indices. These include a complete decomposition with no residuals and the symmetry of the indices (Ang, 2004).…”