Determinants of energy efficiency across countries

Guolin Yao, Purdue University


With economic development, environmental concerns become more important. Economies cannot be developed without energy consumption, which is the major source of greenhouse gas emissions. Higher energy efficiency is one means of reducing emissions, but what determines energy efficiency? In this research we attempt to find answers to this question by using cross-sectional country data; that is, we examine a wide range of possible determinants of energy efficiency at the country level in an attempt to find the most important causal factors. All countries are divided into three income groups: high-income countries, middle-income countries, and low-income countries. Energy intensity is used as a measurement of energy efficiency. All independent variables belong to two categories: quantitative and qualitative. Quantitative variables are measures of the economic conditions, development indicators and energy usage situations. Qualitative variables mainly measure political, societal and economic strengths of a country. The three income groups have different economic and energy attributes. Each group has different sets of variables to explain energy efficiency. Energy prices and winter temperature are both important in high-income and middle-income countries. No qualitative variables appear in the model of high-income countries. Basic economic factors, such as institutions, political stability, urbanization level, population density, are important in low-income countries. Besides similar variables, such as macroeconomic stability and index of rule of law, the hydroelectricity share in total electric generation is also a driver of energy efficiency in middle-income countries. These variables have different policy implications for each group of countries.




Tyner, Purdue University.

Subject Area

Agricultural economics|Energy

Off-Campus Purdue Users:
To access this dissertation, please log in to our
proxy server