Explaining the Energy Consumption Portfolio in a Cross-Section of Countries: Are the BRICs Different?

36 Pages Posted: 9 Mar 2011

See all articles by David M. Arseneau

David M. Arseneau

Board of Governors of the Federal Reserve System

Date Written: February 25, 2011

Abstract

This paper uses disaggregated data from a broad cross-section of countries to empirically assess differences in energy consumption profiles across countries. We find empirical support for the energy ladder hypothesis, which contends that as an economy develops it transits away from a heavier reliance on traditional fuel sources towards an increase in the use of modern commercial energy sources. We also find empirical support for the hypothesis that structural transformation - the idea that as an economy matures, it transforms away from agriculture-based activity into industrial activity and, finally, fully matures into a service-oriented economy - is an important driver for the distribution of end-use energy consumption. However, even when these two hypotheses are taken into account, we continue to find evidence suggesting that the patterns of energy consumption in the BRIC economies are importantly different from those of other economies.

Keywords: Energy and development, energy ladder hypothesis, structural transformation

JEL Classification: Q41, Q43

Suggested Citation

Arseneau, David M., Explaining the Energy Consumption Portfolio in a Cross-Section of Countries: Are the BRICs Different? (February 25, 2011). FRB International Finance Discussion Paper No. 1015, Available at SSRN: https://ssrn.com/abstract=1776063 or http://dx.doi.org/10.2139/ssrn.1776063

David M. Arseneau (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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