Gasoline consumption and economic growth: Evidence from Cameroon

ABSTRACT

This study analyzes the gasoline sector and examines the causal relationship between gasoline consumption and economic growth in Cameroon based on annual data during the period 1975–2014. The unit root tests, the autoregressive vector (VAR) model, and the Wald test to test causality were used as econometric methodologies. The results show that the series are all I(1) and that there is no long-term relationship. The results also show that there is a bidirectional causality relationship between gasoline consumption and economic growth in Cameroon. This means that an increase in gasoline consumption affects economic growth with feedback effect. In view of the result of causality, reducing gasoline consumption without appropriate and established energy policies is not a feasible situation to maintain Cameroon’s economic growth.

KEYWORDS:

• Cameroon
• causality
• economic growth
• gasoline consumption
• VAR model