Attribution of changes in Divisia real energy intensity index — An extension to index decomposition analysis

In this paper we extend the methodology of index decomposition analysis (IDA) in energy studies by quantifying the contribution of individual attributes to the percent change of factors such as the real energy intensity index and structural change index. We apply the proposed method to the real energy intensity index in the multiplicative Logarithmic Mean Divisia Index (M-LMDI) approach, a major IDA technique. Since the M-LMDI is based on geometric mean type indices and chain computation, we need some appropriate method to cope with the difficulties that arise. We present a numerical illustration of the proposed method using the energy consumption and real value added data of the US manufacturing industry, and compare the results obtained by the Fisher real energy intensity index.