Abstract
Government control distorts energy prices which leads to loss of optimal factor combination and, as a result, affects efficiency. Previous researches on energy price distortions did not pay attention to the allocative efficiency specifically. In this paper, we empirically estimate the impact of energy carriers’ price distortion on allocative efficiency in 28 Iranian provinces during 2002–2015 using Stochastic Frontier Analysis (SFA). Results indicate that energy carriers’ price distortions affect allocative efficiency negatively. However, allocative efficiency increased in 2011 due to the energy price reform of 2010; it showed a downward trend in the following years which means that energy price reform was effective only in the short-term. The energy price distortion trend and inefficiency changes are similar in all regions; nonetheless, there are differences in the measures caused by differences in energy consumption, the existence of energy-intensive industries, and technical barriers. Furthermore, among the 28 provinces which are classified to 5 regions, region 2 has the lowest and region 3 has the biggest price distortion during the same period.
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The datasets generated and/or analyzed during the current study are available in the www.databank.mefa.ir , www.amar.org.ir, www.cbi.ir.
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Notes
This study considers the provinces of Tehran and Alborz, as well as the provinces of North Khorasan, Khorasan Razavi, and South Khorasan as one province.
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The authors would like to thank to the editors and anonymous reviewers for their most valuable comments and constructive suggestions on this paper.
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Conceptualization (Ebrahim Hadian), data curation (Farina Farmanbar), formal analysis (Farina Farmanbar), investigation (Farina Farmanbar), methodology (Farina Farmanbar and Zahra Dehghan Shabani), project administration (Ebrahim Hadian), software (Farina Farmanbar and Zahra Dehghan Shabani), supervision (Ebrahim Hadian), validation (Ebrahim Hadian and Zahra Dehghan Shabani), visualization (Ebrahim Hadian), writing—original draft (Farina Farmanbar), writing—review and editing (Ebrahim Hadian and Zahra Dehghan Shabani).
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Hadian, E., Shabani, Z.D. & Farmanbar, F. Impact of energy carriers’ price distortions on energy allocative efficiency: the case study of Iranian provinces. Environ Sci Pollut Res 29, 88725–88736 (2022). https://doi.org/10.1007/s11356-022-21593-0
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DOI: https://doi.org/10.1007/s11356-022-21593-0