Academic journal article The Journal of Developing Areas

Confronting Two Faces of Inequality: A Panel Based Evidence from Indian Cities

Academic journal article The Journal of Developing Areas

Confronting Two Faces of Inequality: A Panel Based Evidence from Indian Cities

Article excerpt

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

Over last few decades, substantial volume of research has been done on the relationship between economic growth and energy consumption (Ozturk, 2010; Omri, 2014). All of these studies have used different contexts, tools and techniques, and proxy measures for estimating the association between economic growth and energy consumption (Kraft and Kraft, 1978; Ghali and El-Sakka, 2004; Altinay and Karagol, 2005; Ang, 2008; Belloumi, 2009; Zhang and Cheng, 2009). However, it can be seen that hardly any of these studies tried to address the social impact of energy consumption, especially from an inequality perspective. The models estimated in these studies assumed the economic structure to be four-sector (Mahalanobis, 1955), where the social determinants of economic growth have been ignored. Social determinants of economic growth are the ones, which can influence other determinants of economic growth, and thereby, influencing the pattern of economic growth. Inequality in these determinants can prove out to be costly for sustainable development. This is the area, which has been addressed in this study from the perspective of an emerging economy.

Objective of this study is to employ a cointegration based error correction model, where the interaction between inequality in energy intensity and social inequality will be assessed. These particular variables are designed using Theil's second measure approach, i.e. using the information entropy measure.1 These variables are selected for capturing the attributes of Indian cities, which are categorized into semi-urban, urban and metropolitan areas. This study accordingly contributes to the literature of development economics by demonstrating an integrated approach to scrutinize the causal associations between inequality in energy intensity and social inequality in the Indian cities by using the error correction models with panel econometric techniques for 139 Indian cities over the period 2001-2013. Consequently, results of this study can prove to be beneficial for the policymakers to come out with effective policy level decision for endorsing social development in Indian cities. For an emerging economy, social issues play a significant role in determining the energy consumption pattern, and in Indian scenario, incidences of energy poverty have been causing serious social issues, which have been affecting the economic growth pattern (Pachauri, 2004; Kemmler and Spreng, 2007; Rao e al., 2009; Ekholm et al., 2010; Bhide and Monroy, 2011). In spite of being one of the largest consumers of energy across the world, per capita energy consumption in India is lower than the global average, and there lies a regional disparity in this parameter. This disparity can be attributed to the societal structure of India, which is largely determined by the level of per capita income. This is another parameter, which also shows the signs of regional disparity. These two disparities are analyzed in this study, and this analysis has been done by segregating the Indian cities in three distinct structural strata.

Considering the recent pro-growth political agenda set by Bharatiya Janata Party (BJP) under the inclusive growth framework brought by UPA, the interrelation between energy intensity inequality and social inequality can prove to be critical for the sustainable economic future of India, and therefore, this interrelation calls for an empirical investigation, which has not been carried out so far in the literature. When environmental sociology explains that inequality in energy intensity can bring forth social inequality, the other side of the association still remains unexplored. In light of this gap identified in the literature, and the present socio-economic condition being faced by India, this study aims to address this issue by incorporating the inequality in energy intensity and social inequality under a cointegration framework. …

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