Economic development and the structure of the demand for commercial energy

To deepen understanding of the relation between economic development and en ergy demand, this study estimates the relations between per-capita GDP and per-capita energy consumption in major economic sectors. Panel data coverin g up to 123 nations are employed, and measurement problems are treated both in dataset construction and in estimation. Time and country fixed effects are assumed, and flexible forms for income effects are employed. There are substantial differences among sectors in the structure of country, time, an d income effects. In particular, the household sector's share of aggregate energy consumption tends to fall with income, the share of transportation t ends to rise, and the share of industry follows an inverse-U pattern.