What Trends in Energy Efficiencies? Evidence from a Robust Test

17 Pages Posted: 18 May 2009 Last revised: 18 Jan 2017

Yannick Le Pen

Université Paris Dauphine

Benoît Sévi

University of Nantes

Date Written: May 12, 2009

Abstract

A proper modeling of the long-run behavior of energy and oil intensities is crucial for many reasons. This paper aims at checking whether this long-run behavior should be modelled as a deterministic or a stochastic trend, or both. We firstly apply a test for a deterministic trend robust to uncertainty about the stochastic trend. Our results indicate that, for the period 1960-2004, energy intensities of only 8 OECD countries out of 25 include a negative deterministic trend, 3 include a positive one and 14 seem to be better modelled using a stochastic trend. When considering a sample of 73 non-OECD countries over the period 1971-2004, we show that only 22 exhibit a deterministic trend (negative for 15 countries and positive for 7 countries). A similar analysis for oil intensity leads to reject the hypothesis of an insignificant deterministic trend for 7 OECD countries out of 23 for the period 1965-2004 and 11 non-OECD countries out of 40 for the period 1971-2004. In the next step, we apply standard unit root tests and find that the unit root hypothesis is not very often rejected. We conclude that a main feature of energy intensities is the presence of a stochastic trend.

Keywords: Energy intensity, oil intensity, deterministic linear trend, stochastic trend

JEL Classification: C22, O40, Q43

Suggested Citation

Le Pen, Yannick and Sévi, Benoît, What Trends in Energy Efficiencies? Evidence from a Robust Test (May 12, 2009). Available at SSRN: https://ssrn.com/abstract=1403466 or http://dx.doi.org/10.2139/ssrn.1403466

Yannick Le Pen

Université Paris Dauphine ( email )

Place du Maréchal de Lattre de Tassigny
75775
France

Benoît Sévi (Contact Author)

University of Nantes ( email )

1, quai de Tourville BP
Nantes Cedex 1
Nantes, 44313
France

HOME PAGE: http://www.iemniae.univ-nantes.fr/sevi-b/0/fiche___annuaireksup/

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