Energy Price Index and Analysis of its Non-linear Effect on Energy Efficiency in Iran with a Sector Approach

The growing trend of energy consumption on the one hand and the scarcity of this factor on the other hand has led to the study of factors affecting the efficiency of energy consumption is of great importance. Therefore, the purpose of this study is to investigate the effect of increases and decreases in real energy prices on energy efficiency in Iran. For this purpose, first, the real energy price index was being calculated at the level of the whole economy and the three sectors of household, commercial and industry. Then, by using an autoregressive approach with nonlinear (asymmetric) distributive interruptions, a basic model based on the whole economy and three sectors models based on the three mentioned partial were estimated. The results show that in the long run, increases and decreases in energy prices had a direct effect on energy efficiency at the level of the whole economy. In the household and industry sectors, decreases in energy prices had a direct effect on energy efficiency, but there was no significant effect of increases in energy prices on energy efficiency in the two sectors. In the commercial sector, there was no significant effect of increases and decreases in energy prices on energy efficiency. Also, the effect was asymmetric confirmed at the level of the whole economy and in the mentioned sectors. The growing trend of energy consumption on the one hand and the scarcity of this factor on the other hand has led to the study of factors affecting the efficiency of energy consumption is of great importance. Therefore, the purpose of this study is to investigate the effect of increases and decreases in real energy prices on energy efficiency in Iran. For this purpose, first, the real energy price index was being calculated at the level of the whole economy and the three sectors of household, commercial and industry. Then, by using an autoregressive approach with nonlinear (asymmetric) distributive interruptions, a basic model based on the whole economy and three sectors models based on the three mentioned partial were estimated. The results show that in the long run, increases and decreases in energy prices had a direct effect on energy efficiency at the level of the whole economy. In the household and industry sectors, decreases in energy prices had a direct effect on energy efficiency, but there was no significant effect of increases in energy prices on energy efficiency in the two sectors. In the commercial sector, there was no significant effect of increases and decreases in energy prices on energy efficiency. Also, the effect was asymmetric confirmed at the level of the whole economy and in the mentioned sectors.