Education and Energy Intensity: Simple Economic Modelling and Preliminary Empirical Results
Abstract
:1. Introduction
2. Why Education May Reduce Energy Intensity?
2.1. A Simple Model Explanation
2.2. Solution of the Model
3. Empirical Application
3.1. Variables and Sources
- Income per capita (Gross Domestic Product per capita (factor cost)). We chose to use GDP per capita at factor costs as this excludes the influence of taxation (and subsidization) in the economy (which GDP at market prices would include). Most articles that explain energy intensity at the country level (such as reference [2,4]) use income per capita as an explanatory variable.
- Percentage of GDP originating in industrial activity (or industrial share in GDP). Some papers have analysed the effect of some sectors’ shares in the economy (e.g., reference [4]) or an industry dummy (e.g., reference [3]) as determinants of energy intensity. To deal with this issue, reference [5] studied energy intensity only in the services sector. Although reference [2] ignored this variable, reference [33] exhaustively explored the relationship between industry share and energy intensity.
- External energy dependence (energy consumption minus energy production). This variable was introduced to proxy price shocks. Prices is also a common variable to enter in regressions in country-specific studies, as in reference [2] or [4]. However, as a substitution variable for the price of energy comparable between different countries, which we could not obtain, we used external energy dependence. As reference [34] stated, “by energy dependence, we mean the vulnerability of a given Member State to energy price shocks or energy supply disruptions”.
3.2. Cross-Country Dependency and Non-Stationarity
3.3. Specification and Methods
4. Results
4.1. Estimation Quality Tests and Evidence
4.2. Interpretation of the Regression Results
5. Shortcomings, Limitations and Prospects for Future Research
6. Conclusions and Policy Implications
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
Appendix A. Alternative Results: Secondary Schooling
(1) | (2) | (3) | |
---|---|---|---|
Without School-Enlarged Sample | Without School-Same Sample | With School | |
Income per Capita | −0.0001 | −0.0001 | −0.0002 |
(0.313) | (0.134) | (0.461) | |
Income per Capita | −0.0007 *** | −0.0007 *** | −0.0003 |
(0.000) | (0.000) | (0.794) | |
Industry Share | −0.009 | −0.004 | 0.0002 |
(0.140) | (0.488) | (0.119) | |
Industry Share | 0.004 | 0.02 | −0.0004 |
(0.425) | (0.663) | (0.103) | |
External Dependence | −0.0000 | −0.00001 ** | −0.00001 * |
(0.174) | (0.023) | (0.058) | |
External Dependence | 0.00003 *** | 0.00003 *** | 0.00006 *** |
(0.003) | (0.007) | (0.000) | |
Secondary School | — | — | −0.0003 |
(0.461) | |||
Secondary School | — | — | −0.0003 |
(0.794) | |||
Error Correction Coefficient | −0.353 *** | −0.367 *** | −0.363 *** |
(0.000) | (0.000) | (0.002) | |
N Observ. | 1631 | 1266 | 1266 |
Avr. N Obs. | 31.4 | 32.5 | 32.5 |
Min–Max | 26–35 | 31–35 | 31–35 |
Number Countries | 52 | 39 | 39 |
Wald | 152.22 *** | 67.41 *** | 67.41 *** |
CD-test (res) | 2.98 *** | 2.54 ** | 0.71 |
(0.003) | (0.011) | (0.480) | |
Stat-test (res) | rejects I(1) | rejects I(1) | rejects I(1) |
Appendix B. Sample Coverage: Countries and Years
Appendix B.1. Column 1
Appendix B.2. Column 2
Appendix B.3. Column 3
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Variable | Observations | Mean | Std. Dev. | Min | Max |
---|---|---|---|---|---|
Energy Intensity | 7322 | 0.801 | 1.078 | 0.006 | 17.679 |
GDP per capita | 9503 | 4538.516 | 10622.56 | 18 | 186,243 |
Share of Industry | 5393 | 27.556 | 14.160 | 0 | 96 |
External Energy Dependency | 6949 | −2980.458 | 63,021.74 | −618,978 | 641,541 |
Primary Schooling | 12,552 | 0.1134 | 0.0556 | 0.0001 | 0.4943 |
Variable | Cross-Dependence (CD) Test | p-Value | Countries |
---|---|---|---|
Energy intensity | 307.89 | 0.000 | 114 |
GDP per capita | 547.61 | 0.000 | 156 |
Industry share | 75.85 | 0.000 | 81 |
(1) | (2) | (3) | |
---|---|---|---|
Without School-Enlarged Sample | Without School-Same Sample | With School | |
Income per capita | −0.0001 | −0.0001 | −0.0001 |
(0.313) | (0.188) | (0.384) | |
Income per capita | −0.0007 *** | −0.0005 *** | −0.004 |
(0.000) | (0.000) | (0.192) | |
Industry Share | −0.009 | −0.005 | 0.018 ** |
(0.140) | (0.458) | (0.027) | |
Industry Share | 0.004 | 0.03 | 0.015 |
(0.425) | (0.574) | (0.236) | |
External Dependence | −0.0000 | −0.00002 ** | −0.0001 * |
(0.174) | (0.023) | (0.100) | |
External Dependence | 0.00003 *** | 0.00003 ** | 0.091 ** |
(0.003) | (0.010) | (0.034) | |
Primary School | — | — | −0.0005 *** |
(0.002) | |||
Primary School | — | — | −0.0001 |
(0.615) | |||
Error Correction Coefficient | −0.353 *** | −0.355 *** | −0.350 *** |
(0.000) | (0.000) | (0.000) | |
N Observ. | 1631 | 1266 | 1266 |
Avr. N Obs. | 31.4 | 32.5 | 32.5 |
Min–Max | 26–35 | 31–35 | 31–35 |
Number Countries | 52 | 39 | 39 |
Wald | 152.22 *** | 136.85 *** | 65.31 *** |
CD-test (res) | 2.98 *** (0.003) | 2.52 ** (0.012) | -0.36 (0.718) |
Stat-test (res) | rejects I(1) | rejects I(1) | rejects I(1) |
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Sequeira, T.; Santos, M. Education and Energy Intensity: Simple Economic Modelling and Preliminary Empirical Results. Sustainability 2018, 10, 2625. https://doi.org/10.3390/su10082625
Sequeira T, Santos M. Education and Energy Intensity: Simple Economic Modelling and Preliminary Empirical Results. Sustainability. 2018; 10(8):2625. https://doi.org/10.3390/su10082625
Chicago/Turabian StyleSequeira, Tiago, and Marcelo Santos. 2018. "Education and Energy Intensity: Simple Economic Modelling and Preliminary Empirical Results" Sustainability 10, no. 8: 2625. https://doi.org/10.3390/su10082625