Study of the Effects of Realizing the P rice of Energy Carriers on Interfactor and Interfuel Substitution in Iran

One of the important issues related to the production and use of inputs، is the Study of the possibility of substitution between inputs. Substitution of energy with other inputs due to its special features such as، finitude، abundance and the accrue of subsidies to energy carriers in Iran، is important. The main purpose of the present paper، is the Study of the effects of Realizing the price of energy carriers on interfactor or interfuel substitution in Iran. To do the Study، using the translog cost function and shfard lemma، first، factor and energy carriers share equations were calculated and then the effects of Realizing the price of energy carriers on interfactor or interfuel substitution within of the johansen – juselius cointegration test in the long run were estimated. The main results suggest is that the Realizing the price of energy causes that the Complementaring labor with energy. That can be said in the its explanation، the labor productivity isn’t so high in Iran، that it can reduce energy consumption through replacement energy. In other words، with available technologies the actualizing the price of energy carriers lead to Complementaring labor with energy and reducing energy consumption will increase unemployment. Realizing the price of energy lead to the weak substitution between the energy and capital. Also، because gas is a cleaner and modern fuel than kerosene، be is substitution kerosene. Electricity replace for coal because the electricity is a cleaner and modern fuel than coal and its consumption increases with technology.