Induced Innovation and Energy Prices

2001/05/01 by David Popp · 80 citations
Business, Management and Accounting · Decision Sciences · Economics, Econometrics and Finance · Mathematics · #Business #Commerce #Computer science #Construct (python library) #Data mining #Demand side #Econometrics #Economics #Energy (signal processing) #Energy, Environment, Economic Growth #Estimation #Industrial organization #Innovation Diffusion and Forecasting #Intellectual Property and Patents #Knowledge base #Management #Mathematics #Measure (data warehouse) #Microeconomics #Quality (philosophy) #Statistics #Supply side #Value (mathematics)

paper · open access · doi:10.1257/000282802760015658

published in American Economic Review 92(1), 160-180 (American Economic Association)

openalex publication_date 2001/05/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04

Abstract

I use U.S. patent data from 1970 to 1994 to estimate the effect of energy prices on energy-efficient innovations. Using patent citations to construct a measure of the usefulness of the existing base of scientific knowledge, I consider the effect of both demand-side factors, which spur innovative activity by increasing the value of new innovations, and supply-side factors, such as scientific advancements that make new innovations possible. I find that both energy prices and the quality of existing knowledge have strongly significant positive effects on innovation. Furthermore, I show that omitting the quality of knowledge adversely affects the estimation results.

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