This study investigated how income inequality is shaped according to energy-related variables. For this, income inequality is the independent variable; energy efficiency, energy import dependency, and energy efficiency are included in the model as independent variables. The data of the 17 founding countries of the OECD between 2011-2020 is used. According to the F Test results, the model has a one-way unit effect. According to the robust Hausman test, the random effect is valid. There are heteroscedasticity and autocorrelation in the context of deviations from the assumption. On the other hand, the data fit a normal distribution. Also, there is no multicollinearity and no inter-unit correlation. In light of all these, the model was estimated with Arellano, Froot, and Rogers Estimator. According to the model estimation results, the model is not statistically significant. This shows that the relationship between income distribution and energy, which Illich expressed qualitatively, is not quantitatively valid for the 17 OECD founding countries.
TopIntroduction
The crises experienced on a global scale inevitably determine the economic literature during and after the crisis. Several important events in the 1970s also shaped mainstream economics literature in this direction. The Bretton Woods system, which expresses an essential stage in the acceleration of globalization through economic institutions (such as the World Bank and IMF), has been seen as the reason for the spread of the problem of inequality and poverty (Soba et al., 2018). Globalization also reveals accumulated inequality (Voutsa, Borovas, 2015). This inequality problem is among the reasons for the collapse of the Bretton Woods system in 1973. The year 1973 is also crucial because it was the year that the OPEC energy crisis emerged. Therefore, it would not be wrong to describe the 70s as the years when increasing inequality became a chronic problem, and the effects of the energy crisis were seen and discussed.
Energy and inequality are the main topics discussed in economics literature in the 1970s. Skorov (1973), Yan (1975), Fuss (1977), Berry et al. (1978), Greenman (1979), Atkinson (1970), Allingham (1972) put this issue at the center of their discussions. Griffin (1974), Gastwirth (1975), Shorrocks (1978)) are not only discussed in the discipline of economics, but also in the field of social sciences, which examines the social aspect of these debates. The publications of Ahluwalia (1976), Kafandaris (1978), Scardigli (1975), and Garnier and Hout (1976) are the examples.
Ivan Illich, from the discipline of sociology, is one of the names who worked on the issue of energy and inequality in the 70s. Illich has adopted a critical approach to fields such as education, energy, and institutions in these fields in a way that also touches economics. His contribution to the literature on the relationship between education and inequality, the “deschooling of society,” has made it known to a broader audience. Illich has carried out studies dealing with the issue of inequality in the field of energy as well as in the field of education. According to Illich, there is a relationship between the amount of energy and the struggle of that country against inequality:
Often overlooked is the fact that equity and energy can only develop together up to a point… More energy abundance means less distributional control over that energy. (Illich, 1974).
Accordingly, increasing a country's energy abundance reduces that country's control over energy. The reduction of control will initially create an inequality in the energy field. However, this inequality will spread to different areas in the process.
In our study, the problem of inequality expresses the inequality of income distribution. The relationship of this inequality with energy-dependent variables will be modeled. In the 1970s, developments in the field of energy were experienced with globalization; however, in this process, there has been a period in which indicators of increasing social and economic inequality have begun to emerge. However, the number of studies dealing with the relationship between energy and inequality in a critical perspective is not sufficient for this period. Our study aims to contribute to the literature by testing the claim of Illich, who has made a name for himself with his critical approaches to this literature, and by examining the data of OECD countries where energy and inequality debates are at the center. The following sections will include a literature review, data set, variable selection, model selection, interpretation, and future research recommendations.