• Environmental and Resource Economics Review
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• v.23 no.2
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• pp.305-330
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• 2014

There has been a lot of studies to identify the driving forces of energy consumption. Many of them decomposed the final energy consumption into the intensity effect, structural effect, and production effect. Those approach, however, could not consider the transformation loss during the electric power generation. Therefore, in this study, we conducted a decomposition analysis on the primary energy use basis to reflect that transformation loss. Log mean Divisia index and refined Laspeyres methods were used for the index decomposition. As results, we could find out that the difference between two approaches were definite. The intensity effect in 2011 is -0.607 times against 1981 in the final energy case, but -0.236 times in the primary energy case. The structure effect in 2011 is 0.227 times against 1981 in the final energy case, but 0.434 times in the primary energy case. Therefore, an analysis on the primary energy basis is essential when conducting a decomposition analysis.