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Energy consumption and the size of the informal economy

Author

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  • Basbay, Mustafa Metin
  • Elgin, Ceyhun
  • Torul, Orhan

Abstract

In this paper, the authors empirically investigate the relationship between energy consumption and the size of the informal economy. Relying on panel data regression models, their results show that at the aggregate level, energy intensity is inversely related to the size of the informal sector, providing actual empirical evidence on the presence of high labor and low capital intensity in the informal economy. Furthermore, the authors also find some support towards the presence of non-linearity and asymmetry in this relationship.

Suggested Citation

  • Basbay, Mustafa Metin & Elgin, Ceyhun & Torul, Orhan, 2016. "Energy consumption and the size of the informal economy," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 10, pages 1-28.
  • Handle: RePEc:zbw:ifweej:201614
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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2016-14
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    References listed on IDEAS

    as
    1. Simon Johnson & Daniel Kaufman & Andrei Shleifer, 1997. "The Unofficial Economy in Transition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 159-240.
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    4. James E. Payne, 2010. "Survey of the international evidence on the causal relationship between energy consumption and growth," Journal of Economic Studies, Emerald Group Publishing, vol. 37(1), pages 53-95, January.
    5. Elgin, Ceyhun & Oztunali, Oguz, 2014. "Pollution and informal economy," Economic Systems, Elsevier, vol. 38(3), pages 333-349.
    6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    informal sector; energy consumption; panel data;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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