Is energy consumption per capita broken stationary? New evidence from regional-based panels

For the first time, a new panel unit root testing procedure, developed by [51]Carrion-i-Silvestre et a]. [2005. Breaking the panels: an application to GDP per capita. Econometrics Journal 8, 159-175], is applied to re-investigate the stationarity of energy consumption per capita for 7 regional panel sets covering the 1971-2002 period. With structural breaks and cross-sectional correlations introduced into the model, it becomes clear that all regional-based panels of energy consumption per capita are stationary. The structural breakpoints identify the likely causes of major changes in energy consumption in the past. The findings underscore the importance of accounting for exogenous shocks to a series and offer several important implications for policy makers and energy economists. (c) 2007 Elsevier Ltd. All rights reserved.