ECONOMETRIC ASSESSMENT OF THE IMPACT OF POVERTY AND RENEWABLE ENERGY CONSUMPTION ON SUSTAINABLE DEVELOPMENT IN AZERBAIJAN

Abstract

This study provides an econometric assessment of the impact of poverty and renewable energy consumption on sustainable development in Azerbaijan. The analysis uses annual data for the period 2001–2020. The Sustainable Development Index is used as the dependent variable, while poverty rate and renewable energy consumption as a share of total final energy consumption are included as the main explanatory variables. A COVID-19 dummy variable is also included to control for the impact of the pandemic year. The model is estimated using the least squares method in EViews. The results show that poverty has a negative and statistically significant relationship with sustainable development, indicating that higher poverty is associated with lower SDI performance. In contrast, renewable energy consumption has a positive and statistically significant relationship with the Sustainable Development Index, suggesting that renewable energy development can support sustainable development outcomes. The COVID-19 dummy variable also has a negative and significant coefficient, showing that the pandemic year was associated with a decline in Azerbaijan’s sustainable development performance. The diagnostic results indicate that the model does not show serious econometric problems, as heteroskedasticity and multicollinearity are not detected, the normality assumption is not rejected, and the residuals are stationary. The practical significance of the study is that its findings can support policy discussions on poverty reduction, renewable energy expansion, and sustainable development planning in Azerbaijan.