Correlation analysis of the energy sector and socioeconomic development: A case study of Colombia

Abstract

This article aims to examine and measure the correlation between Colombia’s energy sector and its economic growth. It utilizes historical data pertaining to the nation’s financial activities, correlation analysis, and a discussion of results were used as the methodology. The objectives were based on analyzing Colombia’s Gross Domestic Product (GDP) and each economic category or sector to examine the impact of this variable on the growth of each of them.

This research employs a mixed-method approach, integrating both qualitative and quantitative perspectives. From a qualitative standpoint, it involves a fundamental analysis of Colombia’s GDP behavior. From a quantitative perspective, a correlational analysis is conducted between GDP data and the growth of each sector of the Colombian economy to measure the impact. Additionally, the study has an exploratory and correlational scope as it initially involved reviewing primary, secondary, and tertiary sources of information to explore the behavior of Colombia’s GDP and its fundamental analysis.

The implemented methodology consists of four phases: (i) Analysis of Colombia’s economic growth; (ii) Economic overview by sectors of activity; (iii) Relationship of the Mining-Energy Sector in Economic Activities, and (iv) Impact of the energy sector on economic development in Colombia.

The economic sectors that impact economic growth and are part of the energy sector include petroleum and mining supply, manufacturing, and energy. The results showed that in Colombia, the commercial activity category has the highest correlation with the GDP index at 94.90%, followed by transportation services with a correlation of 94.25%. In terms of the energy sector, the Manufacturing sector had a 84.10% correlation with the GDP, energy supply activities showed a correlation of 74.23%, and petroleum and mining had a lower connection of 25.14% with the GDP

It was confirmed that the GDP is correlated with and impacts the economic sectors (branches) through the modeling of national energy consumption. By integrating independent variables that describe its behavior, an analytical tool for the sector is created. Furthermore, the correlation index of Colombia’s economic growth and the type of impact on each sector were evidenced.

The conclusions supported the hypothesis that correlation allows for identifying trends in the country’s energy consumption behavior. Future work should focus on projecting the impact of variables other than macroeconomic factors and validating scenarios.