Sensitivity Analysis of Technology Changes for EnergyDemand by Iranian Economic Sectors: an Application of Sherman-Morrisson Method and Input-Output Approach

We undertook a sensitivity analysis of the key demand factors leading to changes of energy consumption in the competitive market, using a Leontief demand-driven approach. We applied the Leontief model to previous research results to study the most sensitive factors leading to the change of energy demand in different economic sectors. Based on the 2011 Iranian symmetrical input–output table, the results show that the secondary energy sector, transportation, wholesale and retail, manufacturing of basic metal and fabricated metal products and non-metallic mineral products respectively have the highest direct and indirect average technologically normalized elasticities of energy demand. Our results indicate that we can reduce energy demand substantially through technological innovations in the above mentioned sectors. JEL Classification: C67, D57, O39, Q32 Keywords: Energy Demand, Leontief demand-driven approach, Sensitivity Analysis, Input-Output Model