Studying the Effect of Energy Factor on Irans Agriculture Sector and Total Economy Production

Energy is an indispensable input for economic activity. Although capital and labor have widely been used as the production factors of many countries productionfunction, but there is little body of literatures which has used the energy as a production factor in Iran. To the importance of energy factor in production process,in this study, the energy factor is entered in the long-run Iran s agriculture sector and total economy production functions. Also, the Cobb-Douglas production function and Auto-Regression Distributed Lag (ARDL) approach are used for estimating the long-run production functions. Results show that the production elasticities of labor,capital and energy factors of Iran s agriculture sector are 0.36, 0.23 and 0.32,respectively. Beside, the production elasticities of labor, last year capital and energy factors of Iran s total economy are 0.55, 0.46 and 1.17, respectively.