On the relationship between energy and development: A comprehensive note on causation and correlation

FathollahZadeh Aghdam, R; Ahmad, N; Naveed, A; Berenjforoush Azar, B

On the relationship between energy and development: A comprehensive note on causation and correlation

FathollahZadeh Aghdam, R Ahmad, N Naveed, A Berenjforoush Azar, B

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Publisher:: ELSEVIER
Publication Type:: Journal Article
Citation:: Energy Strategy Reviews, 2023, 46
Issue Date:: 2023-03-01

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Field	Value	Language
dc.contributor.author	FathollahZadeh Aghdam, R
dc.contributor.author	Ahmad, N
dc.contributor.author	Naveed, A
dc.contributor.author	Berenjforoush Azar, B https://orcid.org/0000-0002-0083-1440
dc.date.accessioned	2024-03-27T04:28:13Z
dc.date.available	2024-03-27T04:28:13Z
dc.date.issued	2023-03-01
dc.identifier.citation	Energy Strategy Reviews, 2023, 46
dc.identifier.issn	2211-467X
dc.identifier.issn	2211-4688
dc.identifier.uri	http://hdl.handle.net/10453/177258
dc.description.abstract	[1,2] are two highly cited studies on the relationship between energy and development. These are two seminal empirical papers touching upon the notions of causation and correlation, respectively, as far as energy economics is concerned. This study is a comprehensive note on these notions’ interconnectedness by revisiting both studies thoroughly and globally. None of these studies has ever been revisited at a global scale to the best of our knowledge. To this end, we first review deeper conceptual and philosophical concerns towards causation and correlation for making a clear distinction between true and spurious causation/correlation. We then develop a novel method to exclude spurious measures from the true ones. We also statistically test several hypotheses regarding the relationship between energy use and wealth creation as captured by income groups. We could not confirm a definite consistency in pair-wise causation between energy and welfare variables at the country levels and across distinct estimation periods. Nor could we denote any strong correlation between energy variables and wealth creation. Causation results are not surprising as previous studies asserted similar remarks. However, this study firmly says that these are mainly due to the circularity and non-linearity of the inter-relationships between energy and welfare variables over time, as new institutions might influence development processes.
dc.language	English
dc.publisher	ELSEVIER
dc.relation.ispartof	Energy Strategy Reviews
dc.relation.isbasedon	10.1016/j.esr.2022.101034
dc.rights	info:eu-repo/semantics/openAccess
dc.subject	1402 Applied Economics, 1605 Policy and Administration
dc.title	On the relationship between energy and development: A comprehensive note on causation and correlation
dc.type	Journal Article
utslib.citation.volume	46
utslib.for	1402 Applied Economics
utslib.for	1605 Policy and Administration
pubs.organisational-group	University of Technology Sydney
pubs.organisational-group	University of Technology Sydney/Faculty of Engineering and Information Technology
pubs.organisational-group	University of Technology Sydney/Faculty of Engineering and Information Technology/School of Professional Practice and Leadership
utslib.copyright.status	open_access	*
dc.date.updated	2024-03-27T04:28:11Z
pubs.publication-status	Published
pubs.volume	46

Abstract:

[1,2] are two highly cited studies on the relationship between energy and development. These are two seminal empirical papers touching upon the notions of causation and correlation, respectively, as far as energy economics is concerned. This study is a comprehensive note on these notions’ interconnectedness by revisiting both studies thoroughly and globally. None of these studies has ever been revisited at a global scale to the best of our knowledge. To this end, we first review deeper conceptual and philosophical concerns towards causation and correlation for making a clear distinction between true and spurious causation/correlation. We then develop a novel method to exclude spurious measures from the true ones. We also statistically test several hypotheses regarding the relationship between energy use and wealth creation as captured by income groups. We could not confirm a definite consistency in pair-wise causation between energy and welfare variables at the country levels and across distinct estimation periods. Nor could we denote any strong correlation between energy variables and wealth creation. Causation results are not surprising as previous studies asserted similar remarks. However, this study firmly says that these are mainly due to the circularity and non-linearity of the inter-relationships between energy and welfare variables over time, as new institutions might influence development processes.

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http://hdl.handle.net/10453/177258