Social Capital and Energy Consumption: an Evidence for Iran

Document Type : Research Article

Authors

Department of Economics, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran

Abstract

Determination of the factors affecting energy consumption has always been considered by planners, economists, and policymakers. Energy plays an essential role in ensuring the social welfare of societies. Considering the high intensity of energy in Iran, reforming the consumption pattern in the country is an inevitable necessity. The modification of energy consumption patterns, in addition to economic factors and price balancers, needs the recognition and application of social variables. The present paper aims to investigate the simultaneous effect of economic variables and social capital on energy consumption in Iran. In this regard, first, the social capital variable has been estimated by fuzzy logic. Then, using the GMM method, the effects of the social capital index and economic variables on energy consumption in Iran have been estimated in the time series and data of the period 1981-2019. The obtained results showed that social capital had a significant negative effect on energy consumption. Despite the government’s focus on price policy and the targeting of subsidies to control consumption, social capital has had a constructive effect on reducing energy consumption without any kind of mechanism. Per capita income, urbanization, trade liberalization, and industrialization have a positive effect on energy consumption. The results also showed that the energy consumption of the previous period had the greatest effect on the energy consumption function.

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References

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Environmental Energy and Economic Research
Volume 7, Issue 2
May 2023
Pages 1-13

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