From earnings to energy: Investigating the linkage between remittances and energy use in South Asia

This study explores the intricate links between remittance inflow and energy consumption in South Asia, a region characterized by high levels of migration abroad and remittance inflows. The present study provides a thorough analysis of vigorous energy utilization in the context of South Asian economies using panel data from 1990 to 2023. By employing advanced econometric techniques, the study has empirically evaluated the influence of personal remittance inflow, and consumer access to electricity on energy consumption, while taking as a possible effect of energy prices, education, employment, urbanization, economic growth, and trade openness to prevent the bias of omitted variables. The findings reveal that a 1 % increase in remittance inflow leads to a 0.282 % rise in energy usage. Moreover, a 1 % increase in access to electricity leads to a 0.570 % rise in energy usage. While a 1 % growth in energy prices leads to a −0.518 % decline in energy utilization. The long-run outputs suggest that remittances inflow, education, GDP, access to electricity, employment, and urbanization increase the usage of energy, while energy prices and trade openness reduce energy utilization in these countries. We further used 2SLS for robustness check and the findings validated these outcomes. The study suggests that governments and policymakers should invest in sustainable energy production and distribution as these countries facing severe energy crises. • This research examines the impact of remittance and CPI on energy utilization. • Remittance, access to electricity and urbanization increases energy consumption. • This study uses FMOLS and DOLS models. • Employment, CPI and trade openness reduce energy consumption.