# About State Energy Statistics

For the state energy statistics on this website, here is a brief explanation of the energy intensity indicators—presented in terms of per capita and economic (per dollar) ratios—used in the charts and graphs. For economic indicators, you can view graphs that use inflation-adjusted dollars. Learn more about:

The energy intensity indicators show broad trends toward increasing energy efficiency in the energy consuming sectors of the economy and the increasing use of renewable energy resources in the states.

## Per Capita and Economic (per Dollar) Ratios

Two types of indicators are represented over time—per capita and per dollar ratios. Per capita indicators are particularly useful in the residential and transportation sectors because the decisions of millions of individual consumers play large roles in determining these trends.

Many of the per capita graphs for state indicators have a relatively flat slope. Because these indicators represent ratios of energy consumption and population, both of which grow over time, a horizontal slope for a particular ratio shows a strong correlation between population and energy consumption in a particular sector.

On the other hand, the purpose of activity in the commercial and industrial sectors is to generate income. Therefore, energy consumption indicators for these sectors are presented as economic (per dollar) instead of per capita ratios.

Per dollar ratios represent economic growth per unit of energy input. In other words, energy consumption is in the denominator of the ratio instead of the numerator (as is the case with per capita energy consumption).

As a result, economic indicators for these two sectors are increasing over time. This means that the commercial and industrial sectors of the U.S. and state economies are experiencing more economic output per unit of energy input. This demonstrates that the commercial and industrial sectors, as well as the U.S. economy as a whole, are becoming less energy intensive.

## Current versus Chained-2005 Dollars

Economic data are presented two ways in this section. One uses current dollars that represent the amounts of actual transactions. The second uses chained-2005 dollars that are adjusted to remove the effects of inflation. Adjusting for inflation allows you to focus on the variables in the analysis without considering the effects of the change caused by inflation in the value of the currency.

Adjusting for inflation is important because inflation compounds over time and the effects can grow quite large even if the annual inflation rate is relatively low. In some cases, the change from inflation in the value of the currency is larger than the change in the physical variables in the analysis. In these cases, you must adjust for inflation to reach any conclusions.

Finally, adjusting for inflation by using chained-2005 dollars gives more meaningful results when you consider economic ratios that involve physical units of energy consumption. This is because energy consumption is the most important variable in these graphs and has very little to do with changes caused by inflation in the value of the currency. This is one reason that economists almost always look at such indicators by using dollars that are adjusted to remove the effects of inflation.

The U.S. Department of Commerce Bureau of Economic Analysis (BEA) uses the base year 2005 to adjust economic statistics such as gross product for states and the nation. You can read a precise definition of how BEA calculates state gross product and adjusts these data for inflation in an article titled Chained Dollar Indexes.