The Relationship Between Industry Structure, Household-number and Energy Consumption in China

Abstract

This article investigates the empirical relationship between energy consumption, industry structure, and household-number. An empirical model with energy consumption, structure and scale of industry, and household-number was built. Using ridge regression analysis and observed data from 1985 to 2007 in China, we examine the relationship between each part of energy consumption and the corresponding coefficients, including gross domestic production (GDP) in the secondary sector (IGDP), in primary and tertiary industries (PTGDP) and number of denizens (NDC). The results show that changing the independent variables (diminishing IGDP/GDP, NDC/GDP, IGDP, PTGDP, and NDC or increasing PTGDP/GDP) or their corresponding coefficients can both lower energy consumption, theoretically. But, in fact, it is not suitable to decrease total energy consumption by changing the independent variables for China. In order to diminish the parameters, the Chinese government must continue to promote energy efficiency by introducing advanced technologies and implementing the policy of saving energy.

Keywords:

• energy policy implication
• improved decomposing methodology
• industry structure
• modeling
• number of household

Notes

Note: ^A c means a constant, t means the trend value, and k shows the lags.

*Indicates significance at the 10% level.

**Indicates significance at the 5% level.

***Indicates significance at the 1% level.

Note: ^A Refers to 0.025% levels of significance.

^B Refers to 0.20% levels of significance.