Sunday, August 17, 2014

Jakob et al. (2012) Revisited

A recent paper by Jakob et al. (2012) finds that there is decoupling between growth in energy use and growth in GDP in developed countries. The authors regress the first differences between five year period means of log per capita energy use on the same transformation of GDP per capita separately for panels of OECD and non-OECD countries. They have 21 OECD and 30 non-OECD countries between 1971 and 2010. They estimate that the elasticity in developing countries is 0.631 (standard error = 0.167) and in developed countries -0.181 (0.343).

I was curious why these results are very different from those in our stylized facts paper where we find a stable monotonic relationship between energy use and PPP GDP per capita over the 1971-2010 period for 99 countries (75 non-OECD, 24 OECD) with an elasticity of around 0.70. Obviously, Jakob et al.'s method is different, their sample is smaller, and they also use market exchange rates. So, I re-estimated their model using our dataset. I find that the elasticity in developing countries is 0.395 (0.081) and in OECD countries 0.479 (0.078). This is in line with our stylized facts results. The numbers are lower probably due to using differences and country and time fixed effects.

In supplementary material, Jakob et al. report that when they use PPP GDP data from the World Development Indicators the elasticity estimates are 0.626 (0.180) and -0.353 (0.474) for non-OECD and OECD countries respectively. I would have doubted that the differences are mostly due to the different source of PPP data  - we used the Penn World Table - but our OECD sample only includes three countries omitted by Jakob et al. So, this will need further investigation.


Jakob, M., M. Haller, and R. Marschinski (2012). “Will History Repeat Itself? Economic Convergence and Convergence in Energy Use Patterns.” Energy Economics 34: 95–104.

No comments:

Post a Comment