Life-cycle Characteristics and Energy Practices in Developing Countries: the Case of Mexico

Developing countries are characterized by slightly higher GDP growth rates that developed ones, are advancing towards universal energy access and many of them are yet to finish their demographic transition, which implies their fertility rate is higher than average and their population is still young. The previous socio-demographic and economic changes could make energy consumption patterns quite different from the ones observed in developed countries. Herein we use Mexico as a case study to estimate determinants of energy consumption as well as the importance that change in generational preferences has on such consumption. We find that results are in line with the few studies performed for developed countries but that the magnitudes are four times stronger. This means that younger generations in Mexico increase their consumption at a much faster rate as they grow older than households in developed countries, which may become a concern for policymakers deciding on investments to meet future energy demand, particularly in the context of the energy transition.