Economic value of electricity in the Korean manufacturing industry

Kyoung Min Lim; Seung Hoon Yoo

doi:10.1080/15567249.2012.673691

Economic value of electricity in the Korean manufacturing industry

Kyoung Min Lim, Seung Hoon Yoo

Dept. of Future Energy Convergence

Seoul National University of Science and Technology (SNUST)

Research output: Contribution to journal › Article › peer-review

7 Scopus citations

Abstract

This paper attempts to estimate the economic value of electricity in the Korean manufacturing industry by employing the concept of the value of marginal product (VMP). This paper uses data on 732 factories surveyed in 2011 and considers two types of production functions: the Cobb–Douglas and trans-log functions. The specification test indicates that the trans-log function is more appropriate for estimating the VMP. The VMP of industrial electricity is estimated to be KRW 239 (USD 0.22) per kWh. Given that the average price of industrial electricity was KRW 76.6 (USD 0.07) per kWh in 2010, the computed VMP is three times as large as the price.

Original language	English
Pages (from-to)	542-546
Number of pages	5
Journal	Energy Sources, Part B: Economics, Planning and Policy
Volume	11
Issue number	6
DOIs	https://doi.org/10.1080/15567249.2012.673691
State	Published - 2 Jun 2016

Keywords

Economic value
industrial electricity
manufacturing industry
trans-log function
value of marginal product

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1080/15567249.2012.673691

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AB - This paper attempts to estimate the economic value of electricity in the Korean manufacturing industry by employing the concept of the value of marginal product (VMP). This paper uses data on 732 factories surveyed in 2011 and considers two types of production functions: the Cobb–Douglas and trans-log functions. The specification test indicates that the trans-log function is more appropriate for estimating the VMP. The VMP of industrial electricity is estimated to be KRW 239 (USD 0.22) per kWh. Given that the average price of industrial electricity was KRW 76.6 (USD 0.07) per kWh in 2010, the computed VMP is three times as large as the price.

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Economic value of electricity in the Korean manufacturing industry

Abstract

Keywords

UN SDGs

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