This paper revisits the empirical evidence on the income elasticity of energy demand by investigating whether it varies with the level of economic development. Our analysis, based on a sample of 111 countries spanning three decades, reveals that the elasticity is not constant and tends to decline as countries become wealthier. As economies become more developed, their energy intensity falls, eventually reaching zero elasticity, which indicates a decoupling between economic growth and energy demand. This finding underscores the importance of considering countries’ stages of economic development when making energy outlook projections.

Principal Fellow- Energy Macro & Microeconomics
Nader AlKathiri is a principal fellow in the Energy Macro & Microeconomics program. He currently leads a project exploring how…
Nader AlKathiri is a principal fellow in the Energy Macro & Microeconomics program. He currently leads a project exploring how different energy transition pathways impact the economies of developing and developed countries, aiming to enhance our understanding of the challenges and opportunities that lie ahead in achieving net-zero emissions. Nader’s research has been published in several international peer-reviewed journals such as Energy Economics, Resources Policy, and Applied Economics. Nader holds a Ph.D. in Economics from the University of Sussex and an M.Sc. in Applied Mathematics and Computational Sciences from KAUST. He also holds an MBA in Finance from Prince Sultan University and a B.Sc. degree in Operations Research from King Saud University.
Expertise
- Energy Economics; Economic Diversification; Macroeconomics; Development Economics; Energy Transition
Publications See all Nader AlKathiri’s publications

Does the Income Elasticity of Energy Demand Vary with the Stages of Economic Development?
This paper revisits the empirical evidence on the income elasticity of energy demand by investigating…
12th January 2025
Behavioral Changes in Household Electricity Consumption from 2015 to 2022
This paper revisits the empirical evidence on the income elasticity of energy demand by investigating…
2nd December 2024