IDEAS home Printed from https://ideas.repec.org/a/aen/journl/ej41-3-liddle.html
   My bibliography  Save this article

Revisiting the Income Elasticity of Energy Consumption: A Heterogeneous, Common Factor, Dynamic OECD & non-OECD Country Panel Analysis

Author

Listed:
  • Brantley Liddle and Hillard Huntington

Abstract

The current paper contributes to the literature on the relationship between economic development and energy demand by assembling a wide panel dataset of energy consumption and prices for 37 OECD and 41 non-OECD countries. The unbalanced data spans 1960-2016, with the full 56 years of data for 17 countries and all countries having at least 18 years. In addition, our dynamic panel estimates address nonstationarity, heterogeneity, and cross-sectional dependence. Most results suggest that the GDP elasticity is less than unity (e.g., 0.7) - i.e., energy intensity will fall with economic growth. Most evidence suggests that the GDP elasticity is similar for OECD and non-OECD countries, and for non-OECD countries, similar across income-bands. Also, there is no evidence that individual country elasticity estimates (for GDP or prices) vary systematically according to income. The price elasticity is larger (in absolute terms) for OECD than for non-OECD countries - indeed, it is typically insignificant for non-OECD countries.

Suggested Citation

  • Brantley Liddle and Hillard Huntington, 2020. "Revisiting the Income Elasticity of Energy Consumption: A Heterogeneous, Common Factor, Dynamic OECD & non-OECD Country Panel Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 207-230.
    • Handle: RePEc:aen:journl:ej41-3-liddle
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=3508
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lawrence C. Hamilton, 1992. "How Robust is Robust Regression?," Stata Technical Bulletin, StataCorp LLC, vol. 1(2).
    2. Adeyemi, Olutomi I. & Hunt, Lester C., 2007. "Modelling OECD industrial energy demand: Asymmetric price responses and energy-saving technical change," Energy Economics, Elsevier, vol. 29(4), pages 693-709, July.
    3. Robert S. Pindyck, 1979. "The Structure of World Energy Demand," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661772, December.
    4. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    5. Liddle, Brantley, 2015. "What Are the Carbon Emissions Elasticities for Income and Population? Bridging STIRPAT and EKC via robust heterogeneous panel estimates," MPRA Paper 61304, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brantley Liddle & Fakhri Hasanov, 2022. "Industry electricity price and output elasticities for high-income and middle-income countries," Empirical Economics, Springer, vol. 62(3), pages 1293-1319, March.
    2. Eberhardt, Markus & Vollrath, Dietrich, 2018. "The Effect of Agricultural Technology on the Speed of Development," World Development, Elsevier, vol. 109(C), pages 483-496.
    3. Diego Ivan Ruge Leiva & Giuseppe Caivano, 2017. "Stock Markets, Banks and Economic Growth in a Context of Common Shocks and Cross-Country Dependencies (Suplement)," Working Papers 04/17, Instituto Universitario de Análisis Económico y Social.
    4. Markus Eberhardt & Andrea F. Presbitero, 2013. "This Time They’re Different: Heterogeneity and Nonlinearity in the Relationship between Debt and Growth," Discussion Papers 2013/10, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    5. Frank Asche & Odd Bjarte Nilsen & Ragnar Tveteras, 2008. "Natural Gas Demand in the European Household Sector," The Energy Journal, , vol. 29(3), pages 27-46, July.
    6. Brantley Liddle, 2024. "To What Extent Do Alternative Energy Sources Displace Coal and Oil in Electricity Generation? A Mean-Group Panel Analysis," Sustainability, MDPI, vol. 16(13), pages 1-11, June.
    7. Brantley Liddle, 2017. "Accounting for Nonlinearity, Asymmetry, Heterogeneity, and Cross-Sectional Dependence in Energy Modeling: US State-Level Panel Analysis," Economies, MDPI, vol. 5(3), pages 1-11, August.
    8. Ryan Rafaty & Geoffroy Dolphin & Felix Pretis, 2020. "Carbon pricing and the elasticity of CO2 emissions," Working Papers EPRG2035, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    9. Lars Sorge & Anne Neumann, 2019. "The Impact of Population, Affluence, Technology, and Urbanization on CO2 Emissions across Income Groups," Discussion Papers of DIW Berlin 1812, DIW Berlin, German Institute for Economic Research.
    10. Vighneswara Swamy & Munusamy Dharani, 2021. "Thresholds in finance–growth nexus: Evidence from G‐7 economies," Australian Economic Papers, Wiley Blackwell, vol. 60(1), pages 1-40, March.
    11. Markus Eberhardt & Francis Teal, 2013. "No Mangoes in the Tundra: Spatial Heterogeneity in Agricultural Productivity Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 914-939, December.
    12. Parker, Steven & Liddle, Brantley, 2016. "Energy efficiency in the manufacturing sector of the OECD: Analysis of price elasticities," Energy Economics, Elsevier, vol. 58(C), pages 38-45.
    13. Daniel M. Bernhofen & Markus Eberhardt & Jianan Li & Stephen Morgan, 2015. "Assessing Market (Dis)Integration in Early Modern China and Europe," CESifo Working Paper Series 5580, CESifo.
    14. Huntington, Hillard & Liddle, Brantley, 2022. "How energy prices shape OECD economic growth: Panel evidence from multiple decades," Energy Economics, Elsevier, vol. 111(C).
    15. Liddle, Brantley & Sadorsky, Perry, 2020. "How much do asymmetric changes in income and energy prices affect energy demand?," The Journal of Economic Asymmetries, Elsevier, vol. 21(C).
    16. Huntington, Hillard G. & Barrios, James J. & Arora, Vipin, 2019. "Review of key international demand elasticities for major industrializing economies," Energy Policy, Elsevier, vol. 133(C).
    17. Markus Eberhardt & Christian Helmers & Hubert Strauss, 2013. "Do Spillovers Matter When Estimating Private Returns to R&D?," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 436-448, May.
    18. Azlina Abd. Aziz & Nik Hashim Nik Mustapha & Roslina Ismail, 2013. "Factors Affecting Energy Demand in Developing Countries: A Dynamic Panel Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 3(Special), pages 1-6.
    19. Schneider, Nicolas & Strielkowski, Wadim, 2023. "Modelling the unit root properties of electricity data—A general note on time-domain applications," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 618(C).

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aen:journl:ej41-3-liddle. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Williams (email available below). General contact details of provider: https://edirc.repec.org/data/iaeeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.