Factors Affecting Energy Consumption in the Agricultural Sector of Iran: The Application of ARDL-FUZZY

Abstract

Given the unlimited needs of mankind and the limited resources available, human beings have always been thinking about how to use the available resources and facilities optimally. Energy plays an important role in economic activities and it is of great importance in agriculture. Over the past four decades, energy consumption in the agricultural sector has increased tremendously. In Iran, energy used to be provided with subsidies to various economic sectors like agriculture in order to support the production. In this study, the ARDL- FUZZY method is used to study the effect of various factors on energy consumption in Iran's agricultural sector. The data on energy consumption by the agricultural sector, the share of the agricultural sector in the economy, the ratio of capital to labor, energy intensity, and energy prices were collected for the period 1974-2015. The results indicate that the share of the agricultural sector has a positive and significant effect on energy consumption over the studied period. The capital/labor ratio has a positive effect on energy consumption. Energy intensity in the studied period eventually has an irregular trend and has a positive effect on energy consumption in this sector. Energy prices (fossil fuels and electricity) have a negative effect (a low level of significance) on energy consumption. Therefore, it is suggested to give more consideration to energy consumption and its underlying factors in policymaking due to the importance of energy and the problem of pollution.