Exploring heterogeneity in studies of income elasticity of renewable energy deployment: a meta-analysis

Abstract The relationship between national income and renewable energy deployment has gained significant attention in recent years, as understanding this linkage is crucial for shaping future energy policy. However, existing empirical studies report widely varying estimates of income elasticity of renewable energy deployment, creating ambiguity around the consistency of this relationship. To address this, we conduct a meta-analysis using 785 elasticity estimates from 68 studies. We apply a meta-regression technique to explore the sources of heterogeneity across these studies. The results of our analysis show an average income elasticity of 0.413, meaning that a 1% increase in national income is associated with 0.413% increase in renewable energy deployment. Our findings show that the heterogeneity in these estimates is explained by various factors including a country’s stage of development, the number of renewable energy sources included in the analysis, and the type of econometric method used. We further find the presence of publication bias which causes overestimation of the magnitude of the income elasticity of renewable energy deployment in published sources. Our findings have implications for renewable energy policy development including the need for caution when using published elasticity estimates for policy formation. We also highlight methodological and contextual issues with a view to future research.