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The impact of energy security on income inequality: The key role of economic development

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  • Lee, Chien-Chiang
  • Xing, Wenwu
  • Lee, Chi-Chuan

Abstract

While the literature has studied various factors affecting income inequality and the influence of energy security on the economy, knowledge is rather limited regarding the linkage between energy security and income inequality. Based on six indicators that capture four aspects of energy security including availability, accessibility, develop-ability, and acceptability, this research applies the dynamic panel threshold approach to explore whether they affect income distribution via global panel data of 68 countries over 2001–2018. The results support inverted U-shape impacts of energy security on income inequality with an improvement of economic development. Specifically, energy security tends to deteriorate income distribution in the early stages of economic development, while it improves income distribution upon reaching a certain level of development. Evidence also reveals that income inequality has a persistence effect over time. Previous income inequality enhances current inequality in a regime with low economic development, while this effect runs opposite in a regime with high development. These findings thus provide valuable implications to policymakers.

Suggested Citation

  • Lee, Chien-Chiang & Xing, Wenwu & Lee, Chi-Chuan, 2022. "The impact of energy security on income inequality: The key role of economic development," Energy, Elsevier, vol. 248(C).
    • Handle: RePEc:eee:energy:v:248:y:2022:i:c:s0360544222004674
    DOI: 10.1016/j.energy.2022.123564
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    More about this item

    Keywords

    Energy security; Income inequality; Dynamic threshold panel model;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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