Energy efficiency of the baltic sea countries: An application of stochastic frontier analysis

Wen Ling Hsiao, Jin-Li Hu*, Chan Hsiao, Ming Chung Chang

*Corresponding author for this work

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

Using the stochastic frontier analysis (SFA) model, this research measures total-factor energy efficiency (TFEE) and disaggregate input efficiency for 10 countries across the Baltic Sea from 2004 to 2014. Real capital, labor, energy use, and carbon dioxide (CO2) are input variables, real gross domestic product (GDP) is the output variable, and renewable energy consumption and urban population are the environmental variables. The results provide not only the TFEE scores, in which statistical noise is considered, but also the determinants of inefficiency, which show the following. (i) Norway, Sweden, Finland, and Latvia perform better with respect to energy efficiency than other countries in the Baltic Sea Region. (ii) Interestingly, the average energy use efficiency scores from 2004 to 2014 in the 10 Baltic countries exhibit a gradual upward trend except for 2009. (iii) For the inefficiency estimates, higher renewable energy consumption and urban population correspond to higher TFEE scores.

Original languageEnglish
Article number104
JournalEnergies
Volume12
Issue number1
DOIs
StatePublished - 1 Jan 2019

Keywords

  • Baltic Sea region
  • distance functions
  • stochastic frontier analysis (SFA)
  • total-factor energy efficiency (TFEE)

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