IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v63y2013icp28-41.html
   My bibliography  Save this article

Energy consumption and human development: Evidence from a panel cointegration and error correction model

Author

Listed:
  • Ouedraogo, Nadia S.

Abstract

In this paper we investigate the co-movement and the causality relationship between energy consumption as well as electricity consumption and the HDI (human development index) using as a proxy of human well-being and by including energy prices as an additional variable, in fifteen developing countries for the period 1988 to 2008. Recently developed tests for the panel unit root, heterogeneous panel cointegration, and panel-based error correction models are employed.

Suggested Citation

  • Ouedraogo, Nadia S., 2013. "Energy consumption and human development: Evidence from a panel cointegration and error correction model," Energy, Elsevier, vol. 63(C), pages 28-41.
    • Handle: RePEc:eee:energy:v:63:y:2013:i:c:p:28-41
    DOI: 10.1016/j.energy.2013.09.067
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544213008372
    Download Restriction: Full text for ScienceDirect subscribers only

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

    References listed on IDEAS

    as
    1. Pettersson, Fredrik & Söderholm, Patrik & Lundmark, Robert, 2012. "Fuel switching and climate and energy policies in the European power generation sector: A generalized Leontief model," Energy Economics, Elsevier, vol. 34(4), pages 1064-1073.
    2. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
    3. Masih, Abul M. M. & Masih, Rumi, 1997. "On the temporal causal relationship between energy consumption, real income, and prices: Some new evidence from Asian-energy dependent NICs Based on a multivariate cointegration/vector error-correctio," Journal of Policy Modeling, Elsevier, vol. 19(4), pages 417-440, August.
    4. Apergis, Nicholas & Payne, James E., 2009. "Energy consumption and economic growth in Central America: Evidence from a panel cointegration and error correction model," Energy Economics, Elsevier, vol. 31(2), pages 211-216.
    5. Bhide, Anjali & Monroy, Carlos Rodríguez, 2011. "Energy poverty: A special focus on energy poverty in India and renewable energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(2), pages 1057-1066, February.
    6. Peter C. B. Phillips & Hyungsik R. Moon, 1999. "Linear Regression Limit Theory for Nonstationary Panel Data," Econometrica, Econometric Society, vol. 67(5), pages 1057-1112, September.
    7. Mazur, Allan, 2011. "Does increasing energy or electricity consumption improve quality of life in industrial nations?," Energy Policy, Elsevier, vol. 39(5), pages 2568-2572, May.
    8. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
    9. Zahnd, Alex & Kimber, Haddix McKay, 2009. "Benefits from a renewable energy village electrification system," Renewable Energy, Elsevier, vol. 34(2), pages 362-368.
    10. Mehrara, Mohsen, 2007. "Energy consumption and economic growth: The case of oil exporting countries," Energy Policy, Elsevier, vol. 35(5), pages 2939-2945, May.
    11. Lee, Chien-Chiang & Chang, Chun-Ping, 2007. "Energy consumption and GDP revisited: A panel analysis of developed and developing countries," Energy Economics, Elsevier, vol. 29(6), pages 1206-1223, November.
    12. Wolde-Rufael, Yemane, 2005. "Energy demand and economic growth: The African experience," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 891-903, November.
    13. Dilaver, Zafer & Hunt, Lester C, 2011. "Modelling and forecasting Turkish residential electricity demand," Energy Policy, Elsevier, vol. 39(6), pages 3117-3127, June.
    14. Chen, Sheng-Tung & Kuo, Hsiao-I & Chen, Chi-Chung, 2007. "The relationship between GDP and electricity consumption in 10 Asian countries," Energy Policy, Elsevier, vol. 35(4), pages 2611-2621, April.
    15. Pedroni, Peter, 2004. "Panel Cointegration: Asymptotic And Finite Sample Properties Of Pooled Time Series Tests With An Application To The Ppp Hypothesis," Econometric Theory, Cambridge University Press, vol. 20(3), pages 597-625, June.
    16. Masih, Abul M. M. & Masih, Rumi, 1996. "Energy consumption, real income and temporal causality: results from a multi-country study based on cointegration and error-correction modelling techniques," Energy Economics, Elsevier, vol. 18(3), pages 165-183, July.
    17. Kaddour Hadri, 2000. "Testing for stationarity in heterogeneous panel data," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 148-161.
    18. Niu, Shuwen & Zhang, Xin & Zhao, Chunsheng & Ding, Yongxia & Niu, Yunzhu & Christensen, Thomas H., 2011. "Household energy use and emission reduction effects of energy conversion in Lanzhou city, China," Renewable Energy, Elsevier, vol. 36(5), pages 1431-1436.
    19. Apergis, Nicholas & Payne, James E., 2011. "A dynamic panel study of economic development and the electricity consumption-growth nexus," Energy Economics, Elsevier, vol. 33(5), pages 770-781, September.
    20. Stern, David I., 1993. "Energy and economic growth in the USA : A multivariate approach," Energy Economics, Elsevier, vol. 15(2), pages 137-150, April.
    21. Jose Goldemberg, 2001. "Energy and Human Well Being," Human Development Occasional Papers (1992-2007) HDOCPA-2001-02, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    22. Joyeux, Roselyne & Ripple, Ronald D., 2007. "Household energy consumption versus income and relative standard of living: A panel approach," Energy Policy, Elsevier, vol. 35(1), pages 50-60, January.
    23. Solow, Robert M, 1974. "The Economics of Resources or the Resources of Economics," American Economic Review, American Economic Association, vol. 64(2), pages 1-14, May.
    24. Bashiri Behmiri, Niaz & Pires Manso, José R., 2013. "How crude oil consumption impacts on economic growth of Sub-Saharan Africa?," Energy, Elsevier, vol. 54(C), pages 74-83.
    25. Pinheiro, Giorgiana & Rendeiro, Gonçalo & Pinho, João & Macedo, Emanuel, 2011. "Rural electrification for isolated consumers: Sustainable management model based on residue biomass," Energy Policy, Elsevier, vol. 39(10), pages 6211-6219, October.
    26. Cleveland, Cutler J. & Kaufmann, Robert K. & Stern, David I., 2000. "Aggregation and the role of energy in the economy," Ecological Economics, Elsevier, vol. 32(2), pages 301-317, February.
    27. Asafu-Adjaye, John, 2000. "The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries," Energy Economics, Elsevier, vol. 22(6), pages 615-625, December.
    28. Lean, Hooi Hooi & Smyth, Russell, 2010. "Multivariate Granger causality between electricity generation, exports, prices and GDP in Malaysia," Energy, Elsevier, vol. 35(9), pages 3640-3648.
    29. Lee, Chien-Chiang & Chang, Chun-Ping, 2008. "Energy consumption and economic growth in Asian economies: A more comprehensive analysis using panel data," Resource and Energy Economics, Elsevier, vol. 30(1), pages 50-65, January.
    30. Mahadevan, Renuka & Asafu-Adjaye, John, 2007. "Energy consumption, economic growth and prices: A reassessment using panel VECM for developed and developing countries," Energy Policy, Elsevier, vol. 35(4), pages 2481-2490, April.
    31. Peter Pedroni, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 653-670, November.
    32. Chandran, V.G.R. & Sharma, Susan & Madhavan, Karunagaran, 2010. "Electricity consumption-growth nexus: The case of Malaysia," Energy Policy, Elsevier, vol. 38(1), pages 606-612, January.
    33. Narayan, Paresh Kumar & Smyth, Russell, 2009. "Multivariate granger causality between electricity consumption, exports and GDP: Evidence from a panel of Middle Eastern countries," Energy Policy, Elsevier, vol. 37(1), pages 229-236, January.
    34. Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
    35. Rapach, David E. & Wohar, Mark E., 2004. "Testing the monetary model of exchange rate determination: a closer look at panels," Journal of International Money and Finance, Elsevier, vol. 23(6), pages 867-895, October.
    36. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    37. Lee, Chien-Chiang & Chang, Chun-Ping & Chen, Pei-Fen, 2008. "Energy-income causality in OECD countries revisited: The key role of capital stock," Energy Economics, Elsevier, vol. 30(5), pages 2359-2373, September.
    38. Leach, Gerald, 1992. "The energy transition," Energy Policy, Elsevier, vol. 20(2), pages 116-123, February.
    39. Belloumi, Mounir, 2009. "Energy consumption and GDP in Tunisia: Cointegration and causality analysis," Energy Policy, Elsevier, vol. 37(7), pages 2745-2753, July.
    40. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    41. Kanagawa, Makoto & Nakata, Toshihiko, 2008. "Assessment of access to electricity and the socio-economic impacts in rural areas of developing countries," Energy Policy, Elsevier, vol. 36(6), pages 2016-2029, June.
    42. Ozturk, Ilhan & Acaravci, Ali, 2011. "Electricity consumption and real GDP causality nexus: Evidence from ARDL bounds testing approach for 11 MENA countries," Applied Energy, Elsevier, vol. 88(8), pages 2885-2892, August.
    43. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    44. Lee, Chien-Chiang, 2005. "Energy consumption and GDP in developing countries: A cointegrated panel analysis," Energy Economics, Elsevier, vol. 27(3), pages 415-427, May.
    45. Peter Pedroni, 2001. "Purchasing Power Parity Tests In Cointegrated Panels," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 727-731, November.
    46. Jebaraj, S. & Iniyan, S., 2006. "A review of energy models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 10(4), pages 281-311, August.
    47. Beaudreau, Bernard C., 2010. "On the methodology of energy-GDP Granger causality tests," Energy, Elsevier, vol. 35(9), pages 3535-3539.
    48. Davis, Mark, 1998. "Rural household energy consumption : The effects of access to electricity--evidence from South Africa," Energy Policy, Elsevier, vol. 26(3), pages 207-217, February.
    49. Pedroni, Peter, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 653-670, Special I.
    50. Mozumder, Pallab & Marathe, Achla, 2007. "Causality relationship between electricity consumption and GDP in Bangladesh," Energy Policy, Elsevier, vol. 35(1), pages 395-402, January.
    51. Maeso-Fernandez, Francisco & Osbat, Chiara & Schnatz, Bernd, 2006. "Towards the estimation of equilibrium exchange rates for transition economies: Methodological issues and a panel cointegration perspective," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 499-517, September.
    52. Soytas, Ugur & Sari, Ramazan, 2003. "Energy consumption and GDP: causality relationship in G-7 countries and emerging markets," Energy Economics, Elsevier, vol. 25(1), pages 33-37, January.
    53. Narayan, Paresh Kumar & Prasad, Arti, 2008. "Electricity consumption-real GDP causality nexus: Evidence from a bootstrapped causality test for 30 OECD countries," Energy Policy, Elsevier, vol. 36(2), pages 910-918, February.
    54. Kaygusuz, K., 2011. "Energy services and energy poverty for sustainable rural development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(2), pages 936-947, February.
    55. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    56. Warr, B.S. & Ayres, R.U., 2010. "Evidence of causality between the quantity and quality of energy consumption and economic growth," Energy, Elsevier, vol. 35(4), pages 1688-1693.
    57. Maddala, G S & Wu, Shaowen, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-652, Special I.
    58. Dias, Rubens A. & Mattos, Cristiano R. & P. Balestieri, Jose A., 2006. "The limits of human development and the use of energy and natural resources," Energy Policy, Elsevier, vol. 34(9), pages 1026-1031, June.
    59. Marti­nez, Daniel M. & Ebenhack, Ben W., 2008. "Understanding the role of energy consumption in human development through the use of saturation phenomena," Energy Policy, Elsevier, vol. 36(4), pages 1430-1435, April.
    60. Reddy, Amulya K.N. & Reddy, B.Sudhakara, 1994. "Substitution of energy carriers for cooking in Bangalore," Energy, Elsevier, vol. 19(5), pages 561-571.
    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. Farhani, Sahbi & Shahbaz, Muhammad & Sbia, Rashid & Chaibi, Anissa, 2014. "What does MENA region initially need: Grow output or mitigate CO2 emissions?," Economic Modelling, Elsevier, vol. 38(C), pages 270-281.
    2. Sahbi FARHANI & Jaleleddine BEN REJEB, 2015. "Link between Economic Growth and Energy Consumption in Over 90 Countries," Working Papers 2015-614, Department of Research, Ipag Business School.
    3. Farhani, Sahbi & Shahbaz, Muhammad & Sbia, Rashid, 2013. "What is MENA Region Initially Needed: Grow Output or Mitigate CO2 Emissions?," MPRA Paper 48859, University Library of Munich, Germany, revised 05 Aug 2013.
    4. repec:ipg:wpaper:2014-529 is not listed on IDEAS
    5. Apergis, Nicholas & Payne, James E., 2009. "Energy consumption and economic growth: Evidence from the Commonwealth of Independent States," Energy Economics, Elsevier, vol. 31(5), pages 641-647, September.
    6. Costantini, Valeria & Martini, Chiara, 2010. "The causality between energy consumption and economic growth: A multi-sectoral analysis using non-stationary cointegrated panel data," Energy Economics, Elsevier, vol. 32(3), pages 591-603, May.
    7. Sadorsky, Perry, 2012. "Energy consumption, output and trade in South America," Energy Economics, Elsevier, vol. 34(2), pages 476-488.
    8. Sarwar, Suleman & Chen, Wei & Waheed, Rida, 2017. "Electricity consumption, oil price and economic growth: Global perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 9-18.
    9. Hasanov, Fakhri & Bulut, Cihan & Suleymanov, Elchin, 2017. "Review of energy-growth nexus: A panel analysis for ten Eurasian oil exporting countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 369-386.
    10. Shahbaz, Muhammad & Sarwar, Suleman & Chen, Wei & Malik, Muhammad Nasir, 2017. "Dynamics of electricity consumption, oil price and economic growth: Global perspective," Energy Policy, Elsevier, vol. 108(C), pages 256-270.
    11. Sadorsky, Perry, 2011. "Trade and energy consumption in the Middle East," Energy Economics, Elsevier, vol. 33(5), pages 739-749, September.
    12. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
    13. Ouedraogo, Nadia S., 2013. "Energy consumption and economic growth: Evidence from the economic community of West African States (ECOWAS)," Energy Economics, Elsevier, vol. 36(C), pages 637-647.
    14. Dobnik, Frauke, 2011. "Energy Consumption and Economic Growth Revisited: Structural Breaks and Cross-section Dependence," Ruhr Economic Papers 303, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    15. Evan Lau & Xiao-Hui Chye & Chee-Keong Choong, 2011. "Energy-Growth Causality: Asian Countries Revisited," International Journal of Energy Economics and Policy, Econjournals, vol. 1(4), pages 140-149.
    16. Apergis, Nicholas & Payne, James E., 2010. "Energy consumption and growth in South America: Evidence from a panel error correction model," Energy Economics, Elsevier, vol. 32(6), pages 1421-1426, November.
    17. Kahia, Montassar & Ben Aissa, Mohamed Safouane, 2014. "Renewable and non-renewable energy consumption and economic growth: Evidence from MENA Net Oil Exporting Countries," MPRA Paper 80776, University Library of Munich, Germany.
    18. Caraiani, Chirața & Lungu, Camelia I. & Dascălu, Cornelia, 2015. "Energy consumption and GDP causality: A three-step analysis for emerging European countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 198-210.
    19. Nguyen, Kim Hanh & Kakinaka, Makoto, 2019. "Renewable energy consumption, carbon emissions, and development stages: Some evidence from panel cointegration analysis," Renewable Energy, Elsevier, vol. 132(C), pages 1049-1057.
    20. Huiru Zhao & Haoran Zhao & Xiaoyu Han & Zhonghua He & Sen Guo, 2016. "Economic Growth, Electricity Consumption, Labor Force and Capital Input: A More Comprehensive Analysis on North China Using Panel Data," Energies, MDPI, Open Access Journal, vol. 9(11), pages 1-21, October.
    21. Fei, Li & Dong, Suocheng & Xue, Li & Liang, Quanxi & Yang, Wangzhou, 2011. "Energy consumption-economic growth relationship and carbon dioxide emissions in China," Energy Policy, Elsevier, vol. 39(2), pages 568-574, February.

    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:eee:energy:v:63:y:2013:i:c:p:28-41. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Haili He). General contact details of provider: http://www.journals.elsevier.com/energy .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.