Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Energy’s Shadow Price and Energy Efficiency in China: A
Non-parametric Input Distance Function Analysis
Jun Yang1, Pengfei Sheng1, 2 and Shackman Joshua D.3
Unlike the prior literature, this paper builds the shadow price for energy input in the framework of
production, and uses the ratio of the shadow price to the market price to describe the energy
utilization. With China’s thirty provinces’ data from 1998 to 2011, the conclusion reveals that the
shadow prices have a rapid growth during the sample period, which means that China has a
better performance in energy utilization since 1998. However, there are eighteen provinces
whose shadow prices are lower than the market prices, and that suggests the energy utilization
is at the low level and can be enhanced by the reallocation of inputs.
Keywords: Energy, Shadow Price, Energy Efficiency
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1
Jun Yang, School of Economics and Business Administration, Chongqing University, Chongqing, China
2
Pengfei Sheng, School of Economics, Henan University, Kaifeng, Henan, China.
Shackman Joshua D.,
California, USA.
3
College of Business Administration, Trident University International, Cypress,