Estimating the Determinants of Energy Consumption in Mutlisectoral African Economies: Evidence From Panel Methods Efficient to Heterogeneity and Cross-Sectional Reliance

Abstract

This present study uses a panel of 24 countries over the period of 1990-2015 to analyze proposed determinants of energy consumption in Africa. The panel is categorized into LI, LMI and UMI African economies. Applying econometric tests and DCCE estimator through a specified DHPD model, issues of heterogeneity and cross-sectional reliance were considered. Our established findings indicated that, GDP, OP, URB, and POPg are potential drivers of EC when capital stock and labor are used as control variables. Further, with the exception of URB-EC, POPg-EC, POPg-GDP, and POPg-URB nexus whose direction of causality were common across country groups, variations occurred for the causalities amid GDP-EC, OP-EC, OP-GDP and URB-GDP nexus for the different income level groups. We therefore conclude that, factors unique to the various country groups in terms of income levels influence the causal affiliations between analyzed variables. Policy recommendation are briefly discussed.