Mineral commodity consumption and intensity of use re-assessed

This article considers twenty-five countries—including high-, upper-middle, and lower-middle income ones—with available information on per capita consumption of seven major metals—steel, aluminum, copper, lead, nickel, tin, and zinc—for the 41-year period of 1975–2015. Based on an auto-regressive distributed lag (ARDL) model, short- and long-run per-capita consumption equations are estimated. In addition, the intensity of use (IOU) hypothesis, which establishes that intensity of metal use (i.e., total metal consumption/GDP) depends on economic development, is re-assessed for these mineral commodities. The estimation results show that own-price elasticity is generally low while income, industry value-added/GDP, gross capital formation/GDP, and urban/total population may be more relevant drivers of per-capita metal consumption. On the other hand, the IOU hypothesis receives mixed support as it may not necessarily hold as a long-run equilibrium relationship, except for copper, nickel and zinc. Consequently, the IOU hypothesis, in its purest form, is not a universal tool to understand consumption trends.