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This paper studies energy efficiency and productivity in the Iranian economic sectors (Industrial, Transportation and Agricultural sectors). We estimate energy input and price elasticity in two sectors (Industrial and Transportation sectors).
In this paper we also have estimated input and price elasticity for
transportation and industry by TSLS (two stage least square) that has derived
from a production function. The estimation of production function which energy has entered as an input shows input elasticity in transportation sector is 1.2 and in industrial sector 0.7. These results show energy input elasticity is high in these sectors.
The price elasticity that has derived from production function in
transportation sector is 0.2 and in industry sector 0.4. This means that energy is
an inelastic input here. Then it indicates that price policy is o"t the only
effective policy for energy saving in these sectors and it is necessary to combine
with other policies.