Sectoral Convergence Trends in per Capita Energy Use Among US States

Abstract

This research studies the convergence hypothesis in per capita energy consumption across 51 US states, not only at an aggregated level but also at a sectoral one during the period 1960–2018. As regards methodology, we applied Phillips and Sul’s framework, and as a robustness test, we used the von Lyncker and Thoennessen calculation. Initially, the findings unveil the rejection of full panel convergence at total energy consumption and at the sectoral level, but when it comes to subgroup analysis, a crucial number of clubs are detected. By and large, for the total energy consumption per capita sample, the club clustering algorithm shows the presence of four convergent clubs and one divergent group. Concerning the commercial sector, the absence of a divergent group is found, while we can detect two subgroups. The convergence findings of the electric power sector divulged four subgroups and one state with divergent action. As regards the industrial sector, the outcomes reported seven clubs and one divergent group, while three clubs and one divergent group emerged in the residential sector. Lastly, with respect to the transportation sector, four clubs and one divergent group are revealed. It could be said then that policy implications are substantial and valuable not only for the convergent states but also for the divergent states. JEL Classifications: C33, O47, Q4, Q40