Economic Development and the Structure of the Demand for Commercial Energy

Joint Program Report
Economic Development and the Structure of the Demand for Commercial Energy
Judson, R.A., R. Schmalensee and T.M. Stoker (1998)
Joint Program Report Series, 16 pages

Report 33 [Download]

Abstract/Summary:

To deepen understanding of the relation between economic development and energy demand, this study estimates the Engel curves that relate per-capita energy consumption in major economic sectors to per-capita GDP. Panel data covering up to 123 nations are employed, and measurement problems are treated both in dataset construction and in estimation. Time and country fixed effects are assumed, and flexible forms for income effects are employed. There are substantial differences among sectors in the structure of country, time, and income effects. In particular, the household sector's share of aggregate energy consumption tends to fall with income, the share of transportation tends to rise, and the share of industry follows an inverse-U pattern.

Citation:

Judson, R.A., R. Schmalensee and T.M. Stoker (1998): Economic Development and the Structure of the Demand for Commercial Energy. Joint Program Report Series Report 33, 16 pages (http://globalchange.mit.edu/publication/13895)
  • Joint Program Report
Economic Development and the Structure of the Demand for Commercial Energy

Judson, R.A., R. Schmalensee and T.M. Stoker

Report 

33
16 pages
1998

Abstract/Summary: 

To deepen understanding of the relation between economic development and energy demand, this study estimates the Engel curves that relate per-capita energy consumption in major economic sectors to per-capita GDP. Panel data covering up to 123 nations are employed, and measurement problems are treated both in dataset construction and in estimation. Time and country fixed effects are assumed, and flexible forms for income effects are employed. There are substantial differences among sectors in the structure of country, time, and income effects. In particular, the household sector's share of aggregate energy consumption tends to fall with income, the share of transportation tends to rise, and the share of industry follows an inverse-U pattern.