Energy efficiency in Iran's provincial with Stochastic frontier production function method

Energy is the main scares factor of production. So paying attention to energy efficiency is necessary in achieving higher growth rates. The aim of this research is to investigate energy consumption efficiency of Iran’s provinces because of their climate differences. We estimate a Cobb-Douglas stochastic frontier production function (based on theoretical and empirical grounds) with provincial data of 1385-1390 to compare energy efficiencies of similar climate provinces. Our findings show that although the provincial inefficiency is rising through time but its effect on provincial production is trivial. The comparison of energy efficiencies between similar climate provinces show that in mountainous climate area, Chaharmahal Bakhtiari province in semi-hot climate area, Hormozgan province, in hot climate southern Khorasan province and in wet climate Gilan province, are more energy efficient provinces. Also we find that average technical efficiency and average energy efficiency of 30 provinces during our time period are 90% and 2% respectfully, which means that although the total technical efficiency of country is high but the energy efficiency is low.