Mixing oil and water? Using hybrid input-output tables in a Structural decomposition analysis

Input-output studies of energy use frequently adopt the so-called hybrid table, where the rows corresponding to energy sectors are in energy units rather than in monetary units. However, we show that, in structural decomposition analyses, this hybrid approach may induce arbitrary results that depend on the choice of units, rather than on changes in economic structure. This is because an economically meaningless sum of monetary and energy units enters the calculations. Our proposed solution to this problem is based on using a sum of monetary units instead, thus avoiding this attempt to mix oil and water.