Proceedings of 31st International Business Research Conference
27 - 29 July 2015, Ryerson University, Toronto, Canada
ISBN: 978-1-922069-80-1
Persistence in Sectoral Energy Use in the United States
and its Implication for Environmental Policy
Firouz Fallahi1
Abstract
Energy use is the primary source of greenhouse gas and carbon emissions; so,
reduction of energy use in any sector of the economy can be used as a tool to fight
against global warming. However, to do that satisfactorily, it is necessary to know
the persistence property of sectoral energy use. Therefore, in this paper, we analyze
the persistence property of sectoral energy use in the United States during 19702009 using different bootstrap and subsampling confidence intervals. These
confidence intervals provide more information compared to the unit root tests. Not
only they provide evidence about the stationarity or non-stationarity of the variables,
but also they show the degree of persistence. In addition, they require fewer
assumptions on the nature of data. The findings show that the energy use in the
commercial and industrial sectors appear to be stationary. However, the energy use
in the residential and transportation sectors are non-stationary. Therefore, the
residential and transportation sectors are the best candidates to implement energy
conservation and economic or environmental oriented policies, because the effect of
these policies would last.
Keywords: Energy use; Confidence interval; Stationary; Persistence; Bootstrap,
subsampling.
JEL classification: C22, Q40
Field of Research: Applied Time Series Econometrics
1Address
for Correspondence: Firouz Fallahi, Department of Economics, University of Tabriz, 29
Bahman
Bolv,
Tabriz,
Iran.
Telephone:
+98-9144190447,
Fax:
+98-4113356013,
E-Mail: ffallahi@tabrizu.ac.ir ; ffallahi@alumni.uottawa.ca