• Environmental and Resource Economics Review
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• v.15 no.5
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• pp.961-974
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• 2006

This paper estimates output and price elasticities of the industrial water in order to provide the government with tools that help make educated decisions with regard with the water provision policies rendering the latter more efficient. The estimated output elasticity produces useful insights on the role of industrial water as an input into the production process while the estimate of price elasticity enablesus to forecast the effects of various water pricing policies. This paper employs the marginal productivity method in order to estimate the abovementioned elasticities. The magnitude of the estimated output elasticity imply that the value of industrial water is much higher than its average price while the price elasticity estimate suggests that the water pricing policy can be an effective tool of controlling the demand for industrial water.

• The Journal of Korean Medicine
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• v.17 no.2 s.32
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• pp.34-47
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• 1996

We have seen a sharp increase in the utilization rate of medical services since the launch of Nation Health Insurance system in 1989. However, the market share of oriental medicine in the Korean health sector has been gradually diminished mainly due to low insurance coverage and high price. Especially high price as an entry barrier to oriental medical services has played a major role in decreasing market share. This paper investigated the effects of price discount on the financial condition and market share of oriental medical institutions. Microeconomic theory and multiple regression analysis were used as a methodology in testing the alternative hypothesis: price discount of enveloped herb drug will result in increases in both the revenue and market share of oriental medical institutions. Data was collected from the statistical yearbook and sample survey. The price elasticity of demand for enveloped herb drug was estimated at 5.8 during 1987-1995 period, which means that a 1% decrease in price will bring about a 5.8% increase in the utilization of oriental medical services. The empirical result shows that a drastic price discount for the enveloped herb drug will eventually improve the financial status of the oriental medical institutions and enlarge the market share of oriental medicine in the Korean health care sector.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.16 no.9
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• pp.5843-5849
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• 2015

This study analyzes the factor demand structure of sweet persimmon as a part of finding out cost cutting measures. Income and cost data from 2001~2013 Agricultural Income Survey are used for placing the translog cost function and estimating price elasticies and cross elasticities of labor, capital and intermediate input. The result shows that own price elasticities of all factors are small in absolute terms. Additionally the result indicates capital and intermediate input cannot be a substitution for labor, which is a top-line cost-share. It means that the demand for labor cconstitutionally can't be reduced in a short time. This implies that cost reduction should be done focusing on intermediate input, particularly on fertilizer and materials which have higher price elasticity of demand.

• Environmental and Resource Economics Review
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• v.23 no.1
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• pp.43-65
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• 2014

In this paper, we test for allocative efficiency of productive inputs including electricity and measure the divergence between the actual and optimal level of electricity for the chemical products, which is a relatively highly electricity-intensive sector in Korean manufacturing industries, by estimating a shadow cost function. Supposing cost minimization subject to market prices was achieved, we derive the price elasticities of demand for each input and simulate the impact of a 10% increase in power rate on its demand and supply price by estimating jointly a cost function with an inverse supply relation. The null hypothesis of allocative efficiency of inputs is rejected over the period 1982-2006. On average, electricity is used more than optimal level by 98% per year. The demand for electricity decreases by 11.4%, and supply price, on average, falls by 0.08%, other things being equal.

• Environmental and Resource Economics Review
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• v.27 no.1
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• pp.29-66
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• 2018

This study constructs an energy-extended KLEM DB of 35 Korean industries, and estimates the elasticities of substitution under various nesting structures of production technologies. Unlike most existing studies that employed only three inputs, K, L, and E, we applied a dual approach where non-energy intermediate input M is also incorporated as a production input. Our dual approach which extended that of van der Werf (2008)'s 3-input model successfully identified and estimated the multi-nested production functions. We provide the estimates of the elasticities of substitution among 4 different energy sources as well. Our estimation results would be used for energy-environment model building for Korea.

• Environmental and Resource Economics Review
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• v.30 no.2
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• pp.325-345
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• 2021

In this paper, we empirically evaluate the potential performance of energy conversion policy and analyze its effects on power generation sector. We first examine the degree of substitutability between energy inputs by measuring the price elasticities of energy demands and then estimate the changes in CO₂ generation when the proportions of nuclear power plants and renewable power generation are increased. The shadow prices of nuclear power and renewable energy are calculated to compare the potential costs of power generation between the two energy sources. We analyze the impacts of the expansion of nuclear power plants and renewable power generation on power supply price. Nuclear and renewable energy were measured to be complementary to each other. The expansion of nuclear power plants has been more effective in reducing CO₂ emissions than increasing renewable power generation. In most years over 2002 to 2016, the impact of nuclear power expansion on the power supply price was generally higher than that of renewable power generation, with relatively large range of fluctuations.

• Environmental and Resource Economics Review
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• v.23 no.1
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• pp.91-132
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• 2014

We investigate the effect of ICT capital on the demands for labor and energy in manufacturing and electricity gas water industries of Korea, US, and UK. Assuming ICT capital, non-ICT capital, labor, electricity, fuel, and material as input factors for manufacturing and ICT capital, non-ICT capital, labor and energy material as input factors for electricity gas water industry, we estimate the Morishima elasticities of substitution. Considering the relative price changes of input factors, ICT capital has substituted labor in manufacturing and electricity water gas industries of the three countries. ICT capital has substituted both electricity and fuel in US and UK manufacturing. Although ICT capital has substituted electricity and fuel each other in Korean manufacturing, ICT capital is unlikely to decrease the demands for electricity and fuel when considering their relative price changes. ICT capital has substituted energy material in electricity gas water industries of the three countries.

• International Area Studies Review
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• v.20 no.1
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• pp.167-181
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• 2016

In Korea, the transportation & telecommunication service industry is composed of public sector entities, such as public transportation and the postal service, and private sector entities. The public sector may be regulated in terms of pricing or is guaranteed a normal profit. Markup can be a subject for regulation. This paper is to set up the markup equation, estimate the industrial markup, and analyze the markup determinants by estimating the factor price elasticities of markup in the Transportation & Telecommunication industry. The factor price elasticities of markup were estimated to be -0.07 in wage rate, -0.45 in import price index, and -0.13 in interest rates. We suggest that import price and interest rate are major factors to be considered first of all in regulating the transportation & telecommunication industry.

• Environmental and Resource Economics Review
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• v.24 no.4
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• pp.727-745
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• 2015

This paper analyzes the firms' optimization behavior in response to rising demand for non-priced renewable energy in the manufacturing industries by using an input distance function. The annual estimates of the shadow price of renewable energy is derived and the trend of its shadow price over time is analyzed. The degree of substitution of renewable energy for fossil-fuels is examined. The input-based Malmquist productivity index, defined as a composite of the technical efficiency and technical change measures, is measured. The contribution of renewable energy input growth to the Malmquist index is analyzed. Empirical results indicate that the shadow price of renewable energy declined at an average annual rate of 17% over the period 1992-2012. Substitutability between renewable energy and fossil-fuels was limited. On average, a 1% increase in renewable energy would decrease Malmquist index by 0.04% per year.

• Journal of Environmental Policy
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• v.9 no.1
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• pp.57-81
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• 2010

Since the Republic of Korea is highly dependent on fossil fuels despite high oil prices, it urgently needs to renew its economic and social system to cut carbon emissions and achieve green growth. Therefore, reforming or eliminating subsidies related to the use of fossil fuels is a timely and oppropriate policy recommendation for Korea. It would be a win-win deal for Korean society as it would not only reduce the use of environmentally harmful fossil fuels but also enhance economic efficiency. In particular, cross-subsidies for industrial, agricultural and night thermal-storage power services make up more than 80 percent of all subsidies provided to the entire electric power industry sector of Korea. Of these cross-subsidies, this paper analyzes the electricity subsidy for industries, which takes up the largest share (about KRW 1.6583 trillion yearly), among the environmentally harmful subsidies in the electric power sector. Thus, the paper focuses on the analysis of ripple effect anticipated when this is reformed. To examine the effects of this subsidy reform, price elasticities were estimated using the ARDL (autoregressive distributed lag) model and quarterly data from 1990 to 2007. The main results of this study show that 1) annual energy demand for electric power in the industrial sector would drop by 12,475,930MWh and 2) $CO_2$ emissions would plummet by 2,644,897 tons per year if the subsidy were reformed. We can deduct from this that the abolition of environmentally harmful subsidies in the electric power sector in the Republic of Korea would considerably contribute to $CO_2$ emissions abatement in the country.