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Nexus between income inequality and consumption of renewable energy in India: a nonlinear examination

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Abstract

While the association between income inequality and environmental degradation has been researched extensively by various scholars, the impact of income inequality on the consumption of renewable energy, however, remains unanswered in the existing literature, the reason why the investigation of the same has been attempted through this study. Apart from income inequality, this paper also explores the impact of per capita income, consumption of nonrenewable energy and human capital development on the consumption of renewable energy, using a Nonlinear Auto-Regressive Distributed Lag (NARDL) model on the data pertaining to India for the period 1980–2016. This study concludes that while the increased income inequality results into reduction in the renewable energy consumption, the increased per capita income and human capital development, on the contrary, lead to an increase in the renewable energy consumption. Similarly, the impact of decrease in per capita income on renewable energy consumption was found to be negative and significant. Lastly, the nonrenewable energy consumption, showing the characteristics of a substitute, was found to have an inverse & significant relationship with renewable energy consumption in both upward as well as downward direction.

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Notes

  1. Once the hydroelectricity plant is commissioned, its marginal or operational cost of electricity production is significantly lower in comparison to that of a thermal power plant (Pikk and Viiding 2013).

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  1. Symbiosis Centre for Management Studies, Nagpur, India

    Rajesh Sharma

  2. School of Business, Mody University of Science and Technology, Lakshmangarh, Sikar, Rajasthan, India

    Surendra Singh Rajpurohit

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  1. Rajesh Sharma
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Correspondence to Surendra Singh Rajpurohit.

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Sharma, R., Rajpurohit, S.S. Nexus between income inequality and consumption of renewable energy in India: a nonlinear examination. Econ Change Restruct 55, 2337–2358 (2022). https://doi.org/10.1007/s10644-022-09389-1

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