Working Paper

Capital Adjustment and the Optimal Fuel Choice

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Hyland, Marie
dc.contributor.author
Steinbuks, Jevgenijs
dc.date.accessioned
2016-11-01T16:01:14Z
dc.date.available
2016-11-01T16:01:14Z
dc.date.issued
2016-10
dc.date.lastModified
2021-04-23T14:04:29Z
dc.description.abstract
This paper analyzes the important, yet often ignored, link between capital adjustment and the choice of fuels used by manufacturing firms. A novel econometric framework, which explicitly incorporates heterogeneous fuel-using capital stocks in the estimation of optimal fuel choice, is applied to a large panel of Irish manufacturing firms. The econometric estimates show a significant variation in the optimal response of capital to changing fuel prices across different fuel-using technologies. For all the technologies, significant costs to capital adjustment are found. The costs are much larger compared with earlier estimates of adjustment costs based on lagged values of output and fuel prices. The findings imply that the path to full adjustment of capital stocks in response to changing fuel prices may be much longer than was previously thought.
en
dc.identifier
http://documents.worldbank.org/curated/en/2016/10/26854337/capital-adjustment-optimal-fuel-choice
dc.identifier.uri
http://hdl.handle.net/10986/25302
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper;No. 7857
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
capital adjustment
dc.subject
fuel choice
dc.subject
fuel price
dc.subject
fuel-use technology
dc.title
Capital Adjustment and the Optimal Fuel Choice
en
dc.type
Working Paper
en
okr.crossref.title
Capital Adjustment and the Optimal Fuel Choice
okr.date.disclosure
2016-10-11
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://documents.worldbank.org/curated/en/2016/10/26854337/capital-adjustment-optimal-fuel-choice
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-7857
okr.identifier.externaldocumentum
090224b084616d3f_1_0
okr.identifier.internaldocumentum
26854337
okr.identifier.report
WPS7857
okr.imported
true
okr.language.supported
en
okr.pdfurl
http://documents.worldbank.org/curated/en/765321476196022651/pdf/WPS7857.pdf
en
okr.topic
Energy :: Energy Consumption
okr.topic
Energy :: Fuels
okr.topic
Environment :: Environment and Energy Efficiency
okr.topic
Private Sector Development :: Private Sector Economics
okr.unit
Environment and Energy Team, Development Research Group

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