The inequality of city-level energy efficiency for China

Abstract

This paper proposes a new methodology for measuring energy efficiency inequality based on the Shephard energy distance function and the "double" stochastic meta-frontier. To incorporate the regional inequality, we use three different grouping criteria, geography, city features, and strategic development goals. We also explore whether the different city grouping criteria can influence the energy efficiency. A panel data of 284 cities in China from 2003 to 2013 is used for empirical analysis. The results indicate that the regional heterogeneity has significant impact on the energy efficiency. We find that different grouping criteria affect energy efficiency, especially, the urban feature criteria. These results highlight the importance of choosing a proper grouping criteria in meta-frontier energy efficiency analysis.

Keywords: Chinese cites; Energy efficiency gap; Grouping criteria; Stochastic meta-frontier.