Driving factors of material consumption in European countries – spatial panel data analysis

Ivan Telega and Agnieszka Telega

Journal of Environmental Economics and Policy, 2020, vol. 9, issue 3, 269-280

Abstract: The aim of this study is to identify the main drivers of material consumption measured by DMC per capita. Due to data availability, the study is limited to European countries in 2000–2016. We analyse panel data compiled from the Eurostat database. At first, we estimated the fixed-effects model with robust standard errors [Arellano, Manuel. 2003. Panel Data Econometrics. Oxford: Oxford University Press]. Then we applied the method proposed by Baltagi and Wu [1999. “Unequally Spaced Panel Data Regressions with AR(1) Disturbances.” Econometric Theory 15: 814–823] for unequally spaced panel data regression models with AR(1) remainder disturbances (implemented in Stata – xtregar). Finally, we estimated the spatial autocorrelation model (SAR) to account for spatial dependencies in the data (Stata – xsmle). Results show the strong coupling of material consumption and GDP per capita. Another strongly significant factors are final energy consumption per capita and the share of the construction sector in GDP. We received mixed results on the impact of investments and R&D expenditures depending on model specification.

Date: 2020
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DOI: 10.1080/21606544.2019.1675186

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