Changes in Energy Output in a Regional Economy: A Structural Decomposition Analysis

Abstract

In the input-output literature, structural decomposition analysis (SDA) has largely been used to disentangle changes in key variables over time. This paper uses the demand-driven input-output model and proposes a simple method to decompose the changes in energy gross output into different determinants. Specifically, the total changes in energy output are divided into two elements: technological changes, showing the effects of changing the technological coefficients of the input-output model, and structural changes, showing the effects of changing the final demand components. The empirical application, which is for the Catalan economy, uses two input-output tables that cover an entire decade (2001 and 2011). The results show a positive contribution of technology to increasing energy output, while the contribution of the final demand for energy is negative. In addition, the various energy activities exert a different repercussion on energy gross output changes. This highlights the importance of using detailed methods in the study of energy issues. Keywords: Energy Output, Input-Output Analysis, Structural Decomposition Analysis, Technological Coefficients, Final Demand.