Abstract

Renewable energy is important especially because of its positive effects on the environment. In addition, rising energy prices increase the interest in energy. Therefore, it will be important to determine the factors affecting the consumption of renewable energy. The aim of this study is to investigate the impact of income inequality on renewable energy for G8 countries over the period 1992-2015. To this purpose, we employed Westerlund and Edgerton’s (2007) bootstrap cointegration test, DSUR coefficient estimator, and Dumitrescu and Hurlin’s (2012) causality test. The results demonstrated that income inequality positively affects renewable energy consumption and a unidirectional causation from income inequality to renewable energy consumption in G8 countries. Thus, it can be said that renewable energy consumption will increase as income inequality increases.