WC: 2898

Part 1. Introduction
Energy has long been a crucial part of global economic growth (Liu and Hao 2018). During
the current period, our planet is experiencing significant transformation, ranging from the
industrial revolution, and technological advancement, to the agriculture 4.0 revolution, energy
still remains an indicator to determine national power and policy-making decisions (Chien
2022). However, economic amelioration relies mostly on energy sources from the natural
environment, possibly burnt or exposed in the near term. In that case, this would result in
deleterious damage to the long-term natural atmosphere sustainability (Tawalbeh et al. 2021).
Additionally, since most nations rely on energy for production, the demand for global energy
is growing (Sarkodie 2020). Therefore, national governments are investing efforts and money
in addressing the matter of energy depletion, which is the ratio of the value of energy
resources’ source involving coal, crude oil, and natural gas, to the lifetime of the remaining
reserves, in % of GNI (The World Bank n.d.; McBeath et al. 2022).

The creation of the Sustainable Development Goal of the UN in 2015 had an objective of
diversersed aspects: climate change and energy, human inequality, and poverty gaps (National
Geographic 2020). Acknowledging the essentials of energy in different parts of human life,
from education, transportation, and communication to production and medicine, the UN’s
sustainable development goals included one that sustainable, affordable, and modern energy
should be accessible to everyone in the global village in 2030 (UN 2022). Monitoring energy
depletion might help to enhance energy efficiency by understanding the risks and
opportunities and reducing the amount of energy usage and its waste (Wang et al. 2018; Raza
et al. 2018). Additionally, International Renewable Energy Agency (2023) proposed that an
appropriate method of dealing with energy depletion would further expand application in
renewable energy sources, which is a solid foundation for energy mix and develop creation
and technology for long-term energy solutions.

The relationship between energy consumption and GNI varies. Kahouli (2019) found out that
the relationship between energy consumption and GNI per capita in OECD countries was bi-
unidirectional, meaning both negative and positive relationships were detected. Similar
findings were confirmed in net oil importing countries and MINT countries (Mexico,
Indonesia, Nigeria, Turkey)-country groups can potentially gain accelerated growth rates (Lin
and Benjamin 2018; Kahia et al. 2017). Besides, AlKhars et al. (2020) also reported that the
relationship between energy depletion and GNI was inconclusive. LSE (2022) reported that
high-income countries, including the USA, the UK, European Union, which only account for
16% of the world population, are consuming an excessive 74% of worldwide energy.
Particularly, high-income countries like the US, Russia or Saudi Arabia are enjoying
prosperity by trading oil, gas, and coal, resulting in a depletion that could severely damage the
whole environmental condition (Abbasi et al. 2o22). In contrast, low-income countries - Latin
America and the Caribbean, Africa, the Middle East and Asia – only utilise8% of the globe’s
energy. Therefore, it is understandable that high-income countries might face a higher
possibility of high levels of energy depletion due to their over usage without proper control
and regulations.

Part 2. Descriptive Statistics and Probability

Units Condition Description
Low-income
Under US$3,500
countries
GNI per capita (current Between $3,500 and Middle-income
US$) $14,000 countries
High-income
Above US$14,000 countries
Table 1: Country categories based on GNI per capita

Table of Contingency

LG MG HG Total
Low energy depletion (L) 8 10 7 25
High energy depletion (H) 2 4 4 10
Total 10 14 11 35
Table 2: Contingency Table of different country categories based on level of energy depletion
and level of GNI per capita

This research would determine whether the level of energy depletion and GNI per capita are
two statistically independent events by comparing P(H) to P(H|HG).
10
P(H) = =0.286
35
 4
P(H ∨HG)= =0.36 ≠ 0.286 → P (H)≠ P(H∨HG )
11
Because P(H) differs from P(H|HG), energy depletion and GNI per capita do not satisfy the
qualifications of statistically independent events. In other words, these two events are
intercorrelated, or the possibility that a country possesses high energy depletion and GNI per
capita could affect each other’s occurrence (Dexter and Epstein 2018).
2
P(H|LG) = =0.2
10
4
P(H|MG) = = 0.286
14
From these calculations, we could conclude that P(H|LG) (0.2) < P(H|MG) (0.286) < P(H|HG)
(0.36), indicating that high-income countries have the most possibility of having high energy
depletion, and the countries in another two groups face a lower possibility. Low-income
countries and middle-income countries only have about 20% possibility to possess high
energy depletion.

Central of Tendency
LG MG HG
Mean 4.092 4.830 3.296
Median 1.357 3.003 0.301
Mode #N/A #N/A #N/A
Variation
LG MG HG
Range 24.272 19.977 10.574
Variance 55.391 32.852 15.639
Standard Deviation (SD) 7.443 5.732 3.955
Coefficient of Variation (CV) 181.893% 118.678% 119.982%
Q1 0.465 0.996 0.163
Q3 3.049 5.073 5.414
IQR 2.584 4.076 5.251
Lower -3.411 -5.118 -7.713
Upper 6.925 11.188 13.290
Table 3: Measurements of central of tendency and variance of energy depletion
 Figure 1: The box-and-whisker-plot of energy depletion level in three nation’s groups.

Firstly, this research applies the formula detecting outliers: if a datapoint is lower than Q1 –
1.5 x IQR or higher than Q3 + 1.5 x IQR, the datapoint is an outlier, expressing an extremely
high or low datapoint compared to others. We detect that the low-income countries dataset has
one outlier, while the middle-income countries dataset has two outliers. Moreover, according
to the box-and-whisker plot in Figure 1, the outliers in this data set are large, which could
affect significantly when calculating the Mean. Because of the outliers, this research would
choose the Median as the measurement of central tendency instead of the Mean. While the
Mean is widely applied and can represent the whole data set since it examines all the data
points, it is affected by the outliers, especially the large ones. Therefore, under this
circumstance, the report would compare the Median of three nation groups. MG(3.003) >
LG(1.357) > HG(0.301), indicating that overall middle-income countries would have the
highest energy depletion (% GNI), while the high-income countries suffer quite low energy
depletion. However, as more than 5% would suggest a high level of energy depletion, the
central tendency indicates that the three groups in this research dataset do not pose an
extremely serious condition. Regarding the variance, IQR is selected because it considers only
the 50% middle data points as it is unaffected by the outliers. Since HG(5.252) > MG(4.046)
> LG(2.584) in IQR, data in high-income countries are more dispersed and varied; in contrast,
low-income countries’ data is more concentrated, not creating a big gap in half of the data.
According to the box-and-whisker plot, the length of the box is suggested by IQR, in which
the high-income countries are the lengthiest, and the shortest are low-income countries. Three
country groups experienced a right-skewed, meaning that data is more concentrated at a lower
rate. The whisker of middle and high-income countries are considerable and lengthier than the
low-income. Several countries have high energy depletion, ranging from more than 5% to
approximately 12%. Low-income countries have the shortest upper whisker, meaning most of
the data is not widely dispersed. However, low-income countries have an extremely large
outlier, a country gaining nearly 25% energy depletion.

Part 3. Confidence Intervals

a. Calculation
95% is the most widely used confidence level because it balances a fair compromise between
being certain that the population value is truly inside the range and having a small enough
range to be useful (Simundic 2008). As a result, I assume a 95% confidence ranges for global
average energy depletion.

As the confidence level is 95%, so the significant level is 5% (= 100% - 95%).

The degree of freedom is equal sample size minus one: df = n -1 = 35-1 = 34
The Population Standard Deviation (σ) is unknown. Hence Z-table can not used. The T-table
will be used to replace the Z-table.
The T-table has a degree of freedom df= 34, and the significant level α = 5% = 0.05.
 t-value (two-tail test) = ±2.032
Significance Level (α) 5%
Confidence Level (1-α) 95%
Population SD (σ) unknown
Sample SD (S) 5.679
Sample Mean (X) 4.137
Sample Size (n) 35
t value (two-tailed) ±2.032
Table 4: Confidece Interval Caluculation Data
Therefore, the confidence interval is:
S
X̄ ± t
√n
5.679 5.679
 4.137 - 2.032 ≤ µ ≤ 4.137 + 2.032
√35 √35
 2.186 ≤ µ ≤ 6.088
In conclusion, a 95% confidence interval for global average energy depletion is between
2.186 and 6.088.

b. Discussion
When constructing confidence intervals, it should be noted that the assumptions must be
satisfied. Because if these assumptions are not met, then the confidence interval may not be
valid and should not be used to make inferences about the population (Siegmund 1985).
The following presumptions should be taken into account while creating confidence intervals
(DiCiccio and Efron 1996):
 Ensure the quantity being measured is normally distributed in the population.
 Guaranteed randomness and representativeness of data. It is possible to use a random
sampling method, in which each member of the population has an equal chance of
being selected for the sample.
 Make sure the sample data contains observations that are all independent of one
another. This implies that there are no connections between and no effect on one
another between the observations in a sample.
 Verify that the sample size is large enough to support applying the central limit
theorem. Depending on the basic shape of the population distribution, this figure will
change, although it is often higher than 30.

Part 4. Hypothesis Testing

a. Testing
According to the World Bank, the average global energy depletion in 2019 was 0.90% of
GNI. This depletion is less than the 95% confidence interval's Lower Bound computed in
section 3a. As a result, the World Bank predicts that the world's average energy depletion will
fall in the future, and a hypothesis test will be run based on this assumption.
Significance Level (α) 5%
Confidence Level (1-α) 95%
Population SD (σ) unknown
Sample SD (S) 5.679
Sample Mean (X) 4.137
Sample Size (n) 35
t value (two-tailed) ±2.032
Lower Bound 2.186
 Upper Bound 6.088
Population mean (µ) 0.9%
Table 5: Data Summary for Hypothesis Test Conduction

Stage 1: Central Limits Theorem (CLT) checking

Sample size n is greater than 30 (n=35>30). CLT can be used.
Stage 2: State the null and alternative hypothesis (H0 & H1)
Null hypothesis H0: µ ≥ 0.9 – The world average energy depletion would be higher than or
equal to 0.9% in the future.
Alternative hypothesis H1: µ < 0.9 – The world average energy depletion would be lower than
0.9% in the future.
Stage 3: Select the test type:
As the assumption is decreasing, we use a One-tailed test (Lower tailed test) in this hypothesis
Test.
Stage 4: Detect the table to use
The Population Standard Deviation (σ) is unknown, hence Z-table can not used. The T-table
will be used to replace the Z-table.
Stage 5: Calculate the critical values (CV)
The degree of freedom: df = n-1 = 35-1 =34)
The significant level α =5%=0.05
=> CV = -t0.05;34 = -1.691
Stage 6: Calculate test statistic:
X̄ ― µ 4.137−0.9
ttest = S = 5.679 = 3.372
√n √ 35
Stage 7: Statistical decision-making:
ttest = 3.372 > CV= -1.691
Therefore, the test statistic did not fall into the rejection region, so we will not reject the null
hypothesis H0.
Stage 8: Managerial decision-making:
As null hypothesis H0 will not reject, we accept that µ ≥ 0.9.
Therefore, then the assumption of the world's average energy depletion will fall in the future
is rejected. And we have a 95% confidence interval that world average energy depletion in the
future will increase or maintain in the future.
Stage 9: Possible error:
The result of null hypothesis H0 will not reject, which can make a type II error if the null
hypothesis is false but we fail to reject it. In this instance, the world's average energy
depletion will fall in the future is true but we fail to detect this circumstance.

b. Discussion
Suppose the number of countries in the dataset is reduced by half, then the possible impact on
the hypothesis testing results is:
First, regarding the statistical decision, it will remain unchanged. The explanation for this is
that when the number of countries is cut, the sample size will decrease, which will also reduce
the degree of freedom. Decreasing the degree of freedom causes the sample mean distribution
to approach a normal distribution, causing the sample mean to be closer to the population
mean (Taupin and Luzzati 1982). It will also make it more difficult for the test to reject the
null hypothesis since falling into the rejection zone will become more difficult (Rouder et al.
2009). Because we do not reject H0 in Part 4a, the statistical decision remains unchanged.
Second, consider the accuracy of the results. A decrease in sample size will increase the
standard error because there is an inverse relationship between them (). In other words, this
will increase the variability of the sampling distribution, the statistical power of the test will
decrease, and the accuracy will also decrease (Devlieger et al. 2016).
Third, in terms of possible errors committed, because we do not reject H0, the error
encountered will be identical to part 4a (type II error).

Part 5. Conclusions
The summary of findings in this report would be described clearly in this part.
Part II of the probability analysis shows that high-income countries are more likely to
experience high energy depletion. Part II of the Variation study similarly reveals that data in
high-income nations are more scattered and diversified, implying that data in this category
have a higher value to being highly diversified. This research shows a positive relationship
between GNI per capita and energy depletion, consistent with the Part 1 conclusions that
high-income nations are at high risk of energy depletion due to overuse and over-dependence
for trading and other economic activities.

However, the findings in Part II of the central analysis show that overall, middle-income
countries will suffer the most from energy depletion (as a percentage of GNI), while high-
income countries will suffer the least energy depletion. This demonstrates a different trend
than the previous conclusion. One probable factor is a lack of adequate control and regulation.
As mentioned in Part I, high-income nations with strong economies, industry, and
industrialization would consume a lot of energy and quickly deplete it. However, this number
can remain low if strict and tight control is maintained (Khan et al. 2016).

Recognizing the vital role of energy in the numerous areas discussed in Part I. This report has
calculated and concluded with our 95% confidence level that the intervals of the world
average energy depletion (in % of GNI) would lie between 2.186 and 6.088. While this range
is relatively safe when considering that higher than 5% poses hazard, the results of Section IV
hypothesis testing point to a likely future increasing trend in global average energy
depletion.Theses findings remind policymakers, environmentalists and national authorities of
necessitating action to mitigate the negative impacts on the socioeconomic system. In
particular, it is vital to monitor the state of energy depletion to provide suitable
recommendations for use and exploitation as soon as possible. The key paths that
governments must follow include expanding applications in renewable energy sources,
integrating the usage of multiple forms of energy, and creating methods for the exploitation of
long-term energy sources (Dincer 2000). Furthermore, each country must pay attention to the
Sustainable Development Goals, specifically Goal 7 of the UN, to achieve sustainable
economic development while maintaining a stable socio-environmental environment (UN
2022).

Part 6: Data Collection in Vietnam

This research understands that collecting data on the petroleum consumption of vehicles in
Vietnam cities is difficult and complex, as the population of vehicles in all Vietnam cities is
large. Moreover, each city’s citizens experience different conditions, unique customs, lifestyle
habits, and transportation preferences and familiarity. As a result, the Stratified Random
Sampling Method is most suitable owing to its several benefits. Indeed (2022) reported that
the Stratified Random Sampling Method could be more accurate and appropriate for diverse
data. Because this method breaks the whole data set into different sub-groups, it provides the
researchers with in-depth understanding of each sub-set’s characteristics. The division of
several sub-group also makes the sampling stages manageable for the conductors. Moreover,
because each group has its own representative, the bias is avoided as much as possible by this
method.
Several errors may occur during the process of collecting data. The first source of error is
called ‘specification error’, in which the implication of the questionnaire is different from the
survey’s aimed parameter (Biemer 2010). An effective solution could be intensive interviewer
training, while in some case it would be quite costly. Data-quality-control, file-preparation,
and risk management should be combined to minimize the cost. Moreover, non-responses also
pose another error, happening when a unit does not response to one or more parts in the
question. Follow-up activities or reducing the length of an interview are suggested to address
this type of error.
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