Semi parametric modelling of investments in energy installations

    Research output: Chapter in Book/Report/Conference proceedingConference paper

    Abstract

    This paper applies a semi-parametric approach to estimating a generalised model of investments in energy installations. The model accounts for irreversibility and lumpiness of investments by linking a parametric specification of the unobservable dynamic shadow price to observed investment behaviour using a non-parametric specification of the adjustment cost function. The results suggest that marginal costs of investments in energy installations increase quickly at small investment levels, whereas the increase slows down at higher investment levels. Therefore, standard parametric adjustment cost models are likely biased such that they over-estimate small investments and under-estimate large investments.
    Original languageEnglish
    Title of host publication10th Congress European association of agricultural economists (EAAE) : Exploring diversity in the European Agri-Food System, Zaragoza, Spain, 28-31 August 2002.
    Pages25
    Publication statusPublished - 2002
    Event10th Congress European association of agricultural economists - Zaragoza
    Duration: 28 Aug 200231 Aug 2002

    Conference

    Conference10th Congress European association of agricultural economists
    CityZaragoza
    Period28/08/0231/08/02

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  • Cite this

    Oude Lansink, A. G. J. M., & Pietola, K. (2002). Semi parametric modelling of investments in energy installations. In 10th Congress European association of agricultural economists (EAAE) : Exploring diversity in the European Agri-Food System, Zaragoza, Spain, 28-31 August 2002. (pp. 25) http://ageconsearch.umn.edu/handle/24813