The nexus between remittances, education, and energy consumption : evidence from developing countries

Energy is essential for economic growth; however, energy consumption also negatively influences long-term economic progress by adversely affecting environmental quality and human welfare in the developing world. Developing nations strive to accomplish more development, which increases their energy consumption. Therefore, this study provides a comprehensive analysis of the dynamics of energy consumption in the context of developing economies using data from 1990 to 2019. By utilizing a host of second-generation econometric methods, the study has empirically analyzed the impact of personal remittances and education on energy consumption, while considering the possible effect of economic growth, energy prices, and trade to avoid omitted variable bias. A 1% increase in remittances leads to a -0.06735% reduction in energy consumption. A 1% increase in education causes a 0.496353% increase in energy consumption. A 1% increase in energy prices leads to a -0.008472% decline in energy consumption. The long-run results indicate that remittances and energy prices reduce energy consumption while education and economic growth increase energy consumption. Trade openness also stimulates energy consumption in these countries. The results imply that remittances and energy prices can be utilized as a tool to reduce energy consumption. We also used panel quantile regression for robustness check and the outcomes validated these findings. İnterestingly, the impact of remittances on energy consumption is more pronounced at upper quantiles. Lastly, the study is concluded by discussing policy directions.