Agriculture Reference
In-Depth Information
comparison between each country and the aggregate results is useful for
characterising each country's deviations from the general evolution.
Total intensity for input
i
in EU agriculture
can be defined as
a weighted sum of intensities for the individual countries
j
, where the
weights are the shares of each country in EU total agricultural output:
The approach used to construct the aggregated intensity suggests
that there are two sources of changes in total intensity. Time variation of
total intensity depends, on both the time variations of intensity for each
individual country and of the time variation of each country's participation
in agricultural output. The within-country variation measures the changes
in agricultural technology for each particular country. Alternatively, the
between-country variation is interpreted as being caused by factors in the
evolution of the agricultural sectors of the different countries.
The following decomposition is used to examine the change in
energy intensity:
The first summation captures the intensity changes (within), and
the second summation captures the structural changes in agricultural
production (between). In addition, the intensity elements can be
decomposed into their elements of substitution, capital, labour, land and
technical change
The same procedure can be applied to any input, such as energy-
based inputs (
N
). A further remark concerning units is interesting. Zarnikau
(1999) has investigated the aggregation of fuels in technical units or in
economic terms. Although results are generally similar, the economic
terms are preferred because substitution effects due to changing relative
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