Exploring the bi-directional long run relationship between energy consumption and life quality

This study aims at investigating the bi-directional long run relationship for the period of 1990–2009 between energy consumption and life quality in 198 countries categorized by income level. To achieve this goal, the canonical cointegrating regression (CCR) was utilized. The results revealed that energy consumption improves the life quality of 70% of the countries despite their different incomes. The study׳s results, unlike all other previous studies, also revealed that the life quality indicators also increase energy consumption, a phenomenon that appears to be true in 65% of the countries. Despite the fact that energy consumption plays an important role in achieving a better life quality, the world still depends on fossil fuels which represent 81% of total energy consumption. Therefore, it is suggested that these countries should rationalize their fossil fuel energy consumption by increasing the role of renewable energy and increasing their energy saving to improve life quality without causing any damage to the environment.