Energy Prices and the Adoption of Energy-Saving Technology

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Date

Nov. 1, 2008

Authors

Joshua Linn

Publication

Journal Article

Reading time

1 minute

This article investigates the link between factor prices, technology and factor demands. Using plant-level data from the Census of Manufactures, I compare the energy intensity of entrants and incumbents from 1967–97. A 10% increase in the price of energy reduces the relative energy intensity of entrants by 1%. The estimate implies that technology adoption by incumbents explains a statistically significant but relatively small fraction of changes in aggregate energy demand in the 1970s and 1980s. Furthermore, entrants’ technology adoption can reduce the long run effect of energy prices on growth, but by less than previous research has found.

View Journal Article

Authors

Joshua Linn

Senior Fellow

Josh Linn is a senior fellow at RFF. His research centers on the effects of environmental policies and economic incentives for new technologies in the transportation, electricity, and industrial sectors.

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