Are Fluctuations in Energy Consumption per Capita Transitory? Evidence from a Panel of Pacific Island Countries

This study applies the panel stationarity test developed by Carrion-i-Silvestre et al 2005. Breaking the panels: An application to GDP per capita. Econometrics Journal 8, 159-175] to examine the stationarity of energy consumption per capita for a panel of 13 Pacific Island countries over the period 1980 to 2005. This test has the advantage that it allows for multiple structural breaks at unknown dates that can differ across countries and can account for all forms of cross-sectional correlation between countries. The conclusion from the study is that energy consumption per capita in approximately 60 per cent of countries is stationary and that energy consumption per capita for the panel as a whole is stationary. The study offers several suggestions for modelling energy consumption and policy-making in the Pacific Islands.