Does economic growth cause energy intensity of well-being in the very long run? Semi-parametric evidence for selected OECD countries

We examine the effect of economic growth on the energy intensity of well-being (EIWB) for a panel of ten high income OECD countries during the period 1870-2020. To do so, we employ two semi-parametric panel data models; namely, the local linear dummy variable estimation (LLDVE) model and the time-varying structural equation model. Our estimates suggest that the relationship between economic growth and EIWB is time-varying. The estimated coefficient function of economic growth was negative in the nineteenth century, positive throughout the twentieth century, but negative since 2000. We also present the trends for EIWB for each country in the sample. The findings suggest that technological advancement and the adoption and employment of renewable energy sources may facilitate sustainable development. This is achievable through improving energy efficiency and easing the pressure of energy consumption on human well-being, particularly when human well-being is measured in terms of average life expectancy at birth, average life expectancy at age 10 and child mortality.