The Relationship between Economic Development and Energy Intensity in ECO Members: Panel Smooth Threshold Regression Model

In order to evaluate the energy intensity changes، we can assess income-elasticity of energy demand. Because constant energy intensity means that there is a proportional relation between energy consumption growth and GDP growth or equally، unit income elasticity. Also، energy intensity evolution per cent is proportional to economic growth rate and energy demand income elasticity. So in order to analyze energy intensity، we metalize energy demand in ECO members and measure energy demand income elasticity. The results of a Panel Threshold Regression model (PTR) with a threshold variable that is defined as a function of GDP per capita، show heterogeneity of the energy demand models in this panel. On the other hand the results of this model estimation for ECO members indicate that income-elasticity is less than one and the amount of energy demand growth is not equal to GDP growth. However the results of article point out the long-term decline of income-elasticity in most of the ECO members. Also، the near income-elasticity’s of panel countries arise from similar economic structures. Prediction of Energy Intensity evolution by income-elasticity estimations reveals that، it decreases as economic growth increases in ECO members.