A Survey of the Effect of Production Factors on Energy Consumption Intensity in Iran: An Analysis Based on Cobb- Douglas Production Function

The present paper investigates the effect of production factors, including technology, physical capital and labour on the energy consumption intensity of Iran. For this purpose, time series data during the period of (1974-2007) have been analyzed within Cobb–Douglas production function framework. The results of the study indicate that the technology and the physical capital have caused the average annual growth rates equal to 1.48238% and 1.24073% for energy intensity, respectively, while labour has averagely decreased the energy intensity equal to 1.33016% over this period. Therefore, these factors explain an average annual growth equal to 1.39295% for energy intensity. Besides, statistics show that energy consumption intensity of Iran has been growing at an average rate of about 3.69% per year during the period of (1974-2007). According to these calculation, there also can conclude that major part of the growth of the energy intensity (about 2.3% per year) has been caused by the other factors.