Econometric analysis of efficiency of energy policies: The case of Turkey

In the past and in the future, energy sources, which are one of the most important tools to meet the needs of human, placed first place in internal and external policies of the countries with the increasing proportion of the population and rapidly developing technology. Since non-renewable energy sources are finite and consumed quickly, countries have to generate alternative solutions to current energy policies. For this reason, with the help of technology, interest in renewable sources of energy is quite on the rise for the energy needed countries. The purpose of the study is to investigate the flexibility in the price of oil whose popularity was left to the natural gas regarding the substitution of natural gas, coal and electricity prices. In this study, by using data from Turkish Statistical Institute and the Ministry of Energy and Natural Resources, energy-one of the main raw materials in the industrial sector of Turkey was identified concerning the substitution of different sources. To obtain price elasticities, the translog cost function was estimated by seemingly unrelated regression. With the help of coefficients achieved from the model coefficients, the cross Morishima elasticities of technical substitution were also interpreted.