Variable selection in the analysis of energy consumption–growth nexus

Mariam Camarero, Anabel Forte, Gonzalo Garcia-Donato, Yurena Mendoza and Javier Ordóñez

Energy Economics, 2015, vol. 52, issue PA, 207-216

Abstract: There is abundant empirical literature that focuses on whether energy consumption is a critical driver of economic growth. The evolution of this literature has largely consisted of attempts to solve the problems and answer the criticisms arising from earlier studies. One of the most common criticisms is that previous work concentrates on the bivariate relationship, energy consumption–economic growth. Many authors try to overcome this critique using control variables. However, the choice of these variables has been ad hoc, made according to the subjective economic rationale of the authors. Our contribution to this literature is to apply a robust probabilistic model to select the explanatory variables from a large set of potential candidates in the case of the US from 1949 to 2010, not only for an aggregate analysis but also for a sector analysis. The results highlight the critical role of public spending and energy intensity in the explanation of growth. Furthermore, since the study reveals different explanatory variables for each sector, it indicates the importance of policy decisions specifically aimed at different sectors.

Keywords: Energy consumption; Economic growth; Control variables; Causality; Probabilistic model; Variable selection (search for similar items in EconPapers)
JEL-codes: C11 C52 F64 O11 O44 Q56 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988315002893
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Variable selection in the analysis of energy consumption-growth nexus (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:52:y:2015:i:pa:p:207-216

DOI: 10.1016/j.eneco.2015.10.012

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().