Parametric and non-parametric convergence analysis of electricity intensity in developed and developing countries.

Abstract

This paper examines the pattern of convergence in electricity intensity in a sample of 79 countries. We apply the residual augmented least squares regression to the convergence of energy intensity. This method has been used in the convergence of per capita energy consumption but not convergence of energy intensity. Furthermore, in contrast to the previous studies which mainly used the conventional beta convergence approach to examine conditional convergence, we use a beta convergence method that is capable of identifying the actual number of countries that contribute to conditional convergence. The sigma and gamma convergences of electricity intensity are also examined. In addition to the full sample of countries, we also examine convergence in African countries, Asian and Oceanic countries, American countries and European countries, separately. Convergences in OECD and non-OECD countries are also examined, separately. In the full sample, the results show convergence exists in 54% of the countries in the total sample. There is convergence in 65% of the African countries, 61% of the American countries, 43% of the Asian and Oceanic countries and 33% of the European countries. In terms of the regional classification, it is also observed that convergence exists for 58% of the non-OECD countries and 31% of the OECD countries. There is evidence for sigma convergence in all the blocs with the exception of European and non-OECD countries. With the exception of African countries, there is evidence for gamma convergence in all the countries and the various blocs. The policy implications of the results are discussed.