Energy Demand and Energy Efficiency in Developing Countries

Lester Hunt and Paraskevas Kipouros ()
Additional contact information
Paraskevas Kipouros: School of Accounting, Economics and Finance, Faculty of Business and Law, University of Portsmouth, Richmond Building, Portland Street, Portsmouth PO1 3DE, UK

Energies, 2023, vol. 16, issue 3, 1-26

Abstract: This paper investigates relative aggregate energy efficiency for a panel of 39 developing countries by econometrically estimating an energy-demand function (EDF) using the stochastic frontier analysis (SFA) approach to provide relative energy efficiency scores over the period 1989 to 2008. Energy efficiency is arguably difficult to define or even conceptualise with several interpretations in the literature but here it is based on an economists’ perspective of efficiency. Hence, the estimates of ‘true’ energy efficiency found in the paper using this approach approximate the economically efficient use of energy capturing both technical and allocative efficiency and the results confirm that energy intensity should not be considered as a de facto standard indicator of energy efficiency. While, by controlling for a range of socio-economic factors, the measurements of energy efficiency obtained by the analysis are deemed more appropriate and hence it is argued that this analysis should be undertaken to avoid potentially misleading advice to policy makers. This study contributes to the literature since it is, as far as is known, the first attempt to apply the benchmarking parametric stochastic frontier technique to econometrically estimate energy efficiency for a large panel of only developing counties around the world. Moreover, the results from such analysis are arguably particularly relevant in a world dominated by environmental concerns, especially in the aftermath of energy price increase as a result of the unrest in Ukraine.

Keywords: energy demand; energy efficiency; ‘True’ energy efficiency; stochastic frontier analysis (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1996-1073/16/3/1056/pdf (application/pdf)
https://www.mdpi.com/1996-1073/16/3/1056/ (text/html)

Related works:
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:gam:jeners:v:16:y:2023:i:3:p:1056-:d:1039495

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().