Impacts of Electricity Efficiency Improvements on Factors Market: A Computable General Equilibrium Approach

The purpose of this paper is to study the “disinvestment effect” of a counterfactual electricity efficiency improvement in Iran. The Researchers apply a computable general equilibrium model with special assumptions about given electricity price, heterogeneous labor market, wage rigidity and imperfect capital mobility between sectors. It was found that after a 10% electricity efficiency improvement, the capital stock declined by 9.53% and employment reduced by 9.48% in electricity sector. Services, industries and agriculture sectors had more capital and labor inflow respectively.