Work detail

The case of coal: A meta-analysis of demand and substitution

Author: Bc. Lucia Sihelská
Year: 2022 - summer
Leaders: doc. PhDr. Zuzana Havránková Ph.D.
Work type: Bachelors
Language: English
Pages: 99
Awards and prizes: Nomination Deloitte Outstanding Thesis Award.
Abstract: Interfuel elasticities capturing energy substitution possibilities are key parameters used to assess the costs of various environmental policies trying to mitigate
climate change. In this thesis, special attention is dedicated to coal, the most
polluting energy input. We collect and synthesize 893 estimates of the ownprice elasticity of demand for coal and cross-price elasticity of demand related to
coal and three alternative fuels – electricity, gas, and oil. The data are collected
from 43 studies. State-of-the-art meta-analytic tools are employed to explore
what drives the estimates of the elasticities. To detect publication bias, we use
both linear and non-linear methods. We find that publication bias affects the
estimates of the own-price elasticity for coal and cross-price elasticity between
three alternative fuels and coal, which causes the reported evidence to be significantly exaggerated. In contrast, substantial publication bias is not detected
in the case of cross-price elasticity between coal and alternative fuels. Based
on this, we demonstrate that the substitution of other fuels for coal is feasible,
although limited. To explain heterogeneity in the estimates, we use Bayesian
model averaging. Other factors that systematically affect the estimated elasticities include the estimation techniques used to generate the estimates and
whether the author controlled for potential sources of endogeneity




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