HOBt The estimated effect of capital is significant

The estimated effect of capital is significant, albeit not robust in specifications (2) and (8). In the individual effects model, capital exerts a positive and significant influence on renewable HOBt consumption. The estimated effect of capital in specification (2) indicates that one dollar increase in capital leads to an increase in renewable 'HOBt' energy consumption by 0.00914 kg of oil equivalent per capita. Investment in capital promotes renewable energy consumption. This finding agrees with the theory of underlying energy demand, which argues that energy has an indirect demand and the amount of energy consumed is influenced by the type of capital appliance. However, this finding contrasts with the estimated effect of capital in a more general model. When renewable energy demand is regressed against capital and other potential determinants the effect of capital remains significant, but the sign switches from being positive to being negative. This may imply that other factors reduce the impact of capital on renewable energy consumption. Arguably, the lack of stability in the coefficient sign in specification (8) may also be a statistical artefact that is associated with the existence of multicollinearity among the explanatory variables. If this is the case, then the estimated effect of capital in specification (2) indicates that one dollar increase in capital leads to an increase in renewable energy consumption by 0.00914 kg of oil equivalent per capita. Investment in capital promotes renewable energy consumption.