Linking Electricity Consumption, Tourism, and Economic Growth in OECD Countries

Abstract

This study investigates the causal link between tourism, electric power consumption and economic growth in 34 OECD countries. Unlike previous studies, this study applies the panel VAR model with the Granger causality test, impulse response, and variance decomposition. The findings show a positive trend for all variables. As economic growth increases, tourism receipts and electricity consumption are increasing as well. The results reveal bi-directional causal relationship between all of the variables, and the findings are consistent with previous studies. These findings may encourage the decision-makers to make the necessary efforts to create a friendly environment for sustainable tourism.