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http://dx.doi.org/10.13106/jafeb.2021.vol8.no4.0613

The Relationship Between Income Inequality and Energy Consumption: A Pareto Optimal Approach  

NAR, Mehmet (Department of Economics, Faculty of Economics and Administrative Sciences, Artvin Coruh University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.4, 2021 , pp. 613-624 More about this Journal
Abstract
This paper analyzes the relationship between income distribution and energy consumption from a Pareto optimal approach. For this purpose, the causality relationship between electricity consumption per capita (kWh) with respect to country groups and energy consumption per capita (kg of oil equivalent) along with gross domestic product per capita was analyzed. In addition to this purpose, a Pareto analysis was conducted to determine the countries with the highest per capita national income, how much of the world total energy they consume, and whether the law of power in the energy and electricity markets exists. Finally, the impact of official development assistance provided to low-income countries by high-income countries on the low-income countries' electricity and energy consumption was analyzed. In other words, it was questioned whether pareto redistribution policies serve the purpose or not. The Engle-Granger causality approach was used in the analysis of the causality relationship between variables. Our analysis indicated that, first, the energy data of the country groups may be inadequate in revealing income inequalities. Second, the existence of Pareto law of power and global income inequality can be explained based on energy data. Finally, Pareto optimal redistribution policies to eliminate income inequality remain inadequate in practice.
Keywords
Energy Economy; Income Inequality; Income Distribution; Energy Consumption; Pareto Optimality; Efficiency;
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