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Oil consumption and economic efficiency: A comparative analysis of advanced, developing and emerging economies

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  • Halkos, George E.
  • Tzeremes, Nickolaos G.

Abstract

This paper investigates the economic efficiency-oil consumption relationship in 42 countries during the period 1986-2006. In a first stage by using DEA window analysis countries' economic efficiencies are obtained. In a second stage an econometric analysis based on robust GMM estimators reveals an inverted 'U'-shape relationship between oil consumption and economic efficiency. In order to capture heterogeneities among countries' development stages the analysis has been separated into two groups (advanced economies and developing/emerging economies). The results show that advanced economies have much higher turning points compared to emerging and developing economies. It appears that oil consumption increases countries' economic efficiency. In addition the consumption patterns of oil products and its derivatives have changed through years and among countries. The different turning points from the econometric analysis indicate the dependence of oil consumption in advanced economies (higher turning points) is driven mainly by household purchasing activities and their standards of living (transport, housing and water, food, etc.). Finally, it appears that oil consumption is the main driver behind the progress of industrialization and urbanization regardless of the country's development stage.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 70 (2011)
Issue (Month): 7 (May)
Pages: 1354-1362

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Handle: RePEc:eee:ecolec:v:70:y:2011:i:7:p:1354-1362

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Web page: http://www.elsevier.com/locate/ecolecon

Related research

Keywords: Economic efficiency Oil consumption DEA window analysis Dynamic panel data models;

References

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Citations

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Cited by:
  1. Arazmuradov, Annageldy, 2011. "Energy consumption and carbon dioxide environmental efficiency for former Soviet Union economies. evidence from DEA window analysis," MPRA Paper 36903, University Library of Munich, Germany, revised 24 Feb 2012.
  2. Rattaphon Wuthisatian, 2014. "Government Resource Subsidy and its Spillover Effects: Evidence from the Excessive Oil Consumption in China," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 2(1), pages 1-12.
  3. Halkos, George & Tzeremes, Nickolaos, 2013. "Renewable energy consumption and economic efficiency: Evidence from European countries," MPRA Paper 44136, University Library of Munich, Germany.

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