The Effects of Policy Fluctuations on Energy Indices In Iran’s Agriculture Sector

Subject Areas : Sustainable production technologies

vida Aghamohseni Fashami ¹ , Reza Moghaddasi ² , Amir Mohammadinejad ³ , Hossein Bakhoda ⁴

1 - PhD student, Department of Agricultural economics, Extension and Education, Science and Research Branch, Islamic Azad University, Tehran, Iran.
2 - Associate Professor, Department of Agricultural economics, Extension and Education, Science and Research, Islamic Azad University, Tehran, Iran.
3 - Assistant Professor, Department of Agricultural economics, Extension and Education, Science and Research Branch, Islamic Azad University, Tehran, Iran.
4 - Assistant Professor, Department of Agricultural Mechanization, Science and Research Branch, Islamic Azad University, Tehran, Iran.

Received: 2024-10-14 Accepted : 2024-12-11 Published : 2024-12-20

Keywords: Policy Fluctuations, Energy Productivity, Energy Consumption, Agriculture, Iran,

Abstract :

Energy is one of the primary factors in production and simultaneously one of the principal commodities. In recent years, the significance of strategic planning in optimizing energy consumption has increased. By examining energy indicators and the impact of various economic policies on them, it is possible to attain a comprehension of past conditions and a picture of the future in different energy sectors. The data spanning from 1947 to 2019 were used through a Non-Linear Autoregressive Distributed Lag (NARDL) for analyzing non-linear effects of policy instability on energy indicators in the agricultural sector of Iran. The results indicated an association among the variables, wherein positive fluctuations in agricultural value-added, with a coefficient of 0.13, and conversely negative fluctuations with a coefficient of -0.09, significantly affected long-term energy consumption. It is notable that the second coefficient lacked statistical significance. Additionally, the asymmetrical effects of other variables on energy consumption and productivity in agricultural practices was confirmed.

References:

 Al-Mulali, U., Fereidouni, H. G., Lee, J. Y., & Sab, C. N. B. C. (2013). Examining the bi-directional long run relationship between renewable energy consumption and GDP growth. Renewable and sustainable energy reviews, 22: 209-222. https://doi.org/210.1016/j.rser.2013.1002.1005.
 Ang, J. B. (2008). Economic development, pollutant emissions and energy consumption in Malaysia. Journal of Policy Modeling, 30(2): 271-278. https://doi.org/210.1016/j.jpolmod.2007.1004.1010.
 Armen, S. A., Kamali Dehkordi, P., & Hibti, R. (2010). Investigating the relationship between the consumption of energy carriers and industrial production in Iran. Energy Economy Studies, 7(27): 19-46 (in Farsi).
 Asadi, A., Esmaeili, M., Bakhshvar, F., & Sadeghpour, A. (2018). Investigation of factors affecting energy consumption in Iran (with an emphasis on the financial development variable). Financial and Economic Policy Quarterly, 6(21): 81-107 (in Farsi).
 Baker, S. R., Bloom, N., & Davis, S. J. (2016). Measuring economic policy uncertainty. The quarterly journal of economics, 131(4): 1593-1636. https://doi.org/1510.1093/qje/qjw1024.
 Bashir, M. A., Sheng, B., Doğan, B., Sarwar, S., & Shahzad, U. (2020). Export product diversification and energy efficiency: Empirical evidence from OECD countries. Structural Change and Economic Dynamics, 55: 232-243. https://doi.org/210.1016/j.strueco.2020.1009.1002.
 Bloom, N. (2014). Fluctuations in uncertainty. Journal of economic Perspectives, 28(2): 153-176. https://doi.org/ 110.1257/jep.1228.1252.1153.
 Branson, W. H. (1997). Macroeconomic Theory and Policies (A. Shakri, Trans.; 6th ed.). Ni Publishing House
 Broock, W. A., Scheinkman, J. A., Dechert, W. D., & LeBaron, B. (1996). A test for independence based on the correlation dimension. Econometric reviews, 15(3): 197-235. https://doi.org/110.1080/07474939608800353.
 Cole, M. A. (2006). Does trade liberalization increase national energy use? Economics Letters, 92(1): 108-112. https://doi.org/110.1016/j.econlet.2006.1001.1018.
 Fathi, Y. (2002). Tariff and non-tariff barriers to Iran's export in target markets. Institute of Business Studies and Research.
 Halicioglu, F. (2011). A dynamic econometric study of income, energy and exports in Turkey. Energy, 36(5): 3348-3354. https://doi.org/3310.1016/j.energy.2011.3303.3031.
 Huang, J., Du, D., & Tao, Q. (2017). An analysis of technological factors and energy intensity in China. Energy Policy, 109: 1-9. https://doi.org/10.1016/j. enpol.2017.1006.1048.
 Islam, F., Shahbaz, M., Ahmed, A. U., & Alam, M. M. (2013). Financial development and energy consumption nexus in Malaysia: a multivariate time series analysis. Economic modelling, 30: 435-441. https://doi.org/410.1016/j.econmod.2012.1009.1033.
 Jin, T., & Kim, J. (2018). Coal consumption and economic growth: panel cointegration and causality evidence from OECD and non-OECD countries. Sustainability, 10(3): 660. https://doi.org/610.1016/j.eneco.2022.105940.
 Kahrl, F., & Roland-Holst, D. (2008). Energy and exports in China. China Economic Review, 19(4): 649-658. https://doi.org/610.1016/j.chieco.2008.1005.1004.
 Koengkan, M. (2018). The positive impact of trade openness on consumption of energy: Fresh evidence from Andean community countries. Energy, 158: 936-943. https://doi.org/910.1016/j.energy.2018.1006.1091.
 Li, J., Zhang, X., Ali, S., & Khan, Z. (2020). Eco-innovation and energy productivity: New determinants of renewable energy consumption. Journal of Environmental Management, 271: 111028. https://doi.org/111010.111016/j.jenvman.112020.111028.
 Moradi, F., Agheli, L., & Asari Arani, A. (2021). The impact of uncertainty in economic policies on energy intensity in Iran. Energy Economy Studies Quarterly, 18(72): 27-58 (in Farsi).
 Nili, M. (2013). Discussions of advanced macroeconomics. Sharif University of Technology Publications.
 Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3): 289-326. https://doi.org/210.1002/jae.1616.
 Sadorsky, P. (2010). Trade and energy consumption in the Middle East. Energy Economics, 33(5): 739-749. https://doi.org/710.1016/j.eneco.2010.1012.1012.
 Sadorsky, P. (2011). Energy consumption, output and trade in South America. Energy Economics, 34(2): 476-488. https://doi.org/410.1016/j.eneco.2011.1012.1008.
 Shahbaz, M., & Lean, H. H. (2012). Does financial development increase energy consumption? The role of industrialization and urbanization in Tunisia. Energy Policy, 40: 473-479. https://doi.org/410.1016/j.enpol.2011.1010.1050.
 Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. Festschrift in honor of Peter Schmidt: Econometric methods and applications: 281-314. https://link.springer.com/chapter/210.1007/1978-1001-4899-8008-1003_1009.
 Vahidi, M. (2004). Investigating energy consumption, price and real income of OPEC member countries Shiraz University (in Farsi).
 Wang, B., Meng, C., & Yu, H. (2023). The impact of economic policy uncertainty on regional total-factor energy productivity in China. International Journal of Environmental Research and Public Health, 20(4): 2855. https://doi.org/2810.3390/ijerph20042855.
 Welsch, H., & Ochsen, C. (2005). The determinants of aggregate energy use in West Germany: factor substitution, technological change, and trade. Energy Economics, 27(1): 93-111. https://doi.org/110.1016/j.eneco.2004.1011.1004.
 Yang, Z., & Hong, J. (2021). Trade policy uncertainty and energy intensity: Evidence from Chinese industrial firms. Energy Economics, 103: 105606. https://doi.org/105610.101016/j.eneco.102021.105606.