Causality Linkages among Energy Poverty, Income Inequality, Income Poverty and Growth: A System Dynamic Modelling Approach

The study aims to bring together the new dimensions of poverty dynamics in a system that will probe the casual relationship among the energy poverty, income inequality, income poverty and growth. The study is based on the hypotheses; (I) Does energy poverty cause income inequality? (II) Does energy...

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Bibliographic Details
Published inPakistan development review Vol. 54; no. 4; pp. 407 - 425
Main Authors Murtaza, Ghulam, Faridi, Muhammad Zahir
Format Journal Article
LanguageEnglish
Published Islamabad Pakistan Institute of Development Economics 22.12.2015
Subjects
Alternative energy
Asymmetry
Biomass
Biomass energy
Causality
Developing countries
DISPARITIES, POLARISATION AND DEVELOPMENT
Economic development
Economic models
Economic research
Energy consumption
Energy management
Income distribution
Income inequality
LDCs
Life expectancy
Per capita
Population
Productivity
Studies
Pakistan
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Summary:The study aims to bring together the new dimensions of poverty dynamics in a system that will probe the casual relationship among the energy poverty, income inequality, income poverty and growth. The study is based on the hypotheses; (I) Does energy poverty cause income inequality? (II) Does energy poverty a factual impediment to growth? (III) Does energy poverty spur income poverty? And, whether the alterative also exist against these hypotheses? For this purpose, study accomplishes an energy poverty measure at national or aggregated macro level defined by International Energy Agency (IEA). For causality analysis, study utilises annually time series data ranges from 1973 to 2012; the properties of time series data justify the appropriate method for the causality analysis should be used. The present study models the poverty dynamics in Granger non causality context evidenced from augmented VAR system and follows Toda and Yamamoto (1995), multivariate TY-procedure for estimation of VARs system at level though seemingly unrelated regression (SUR) using modified Wald-stat (M-Wald) as the traditional coefficient restriction. Whereas F-stat does not follow the normal distribution when simple OLS is used for VARs system estimation at level. Empirical findings of the study go over the main points; a significant bi-variant causality linkage between growth and energy poverty; uni-variant causality that runs from income poverty to energy poverty and from income inequality to energy poverty is observed.
ISSN:0030-9729
DOI:10.30541/v54i4i-iipp.407-425