Are fluctuations in electricity consumption per capita transitory? evidence from developed and developing economies

Shahbaz, Muhammad and Tiwari, Aviral and Ilhan, Ozturk and Abdul, Farooq (2012): Are fluctuations in electricity consumption per capita transitory? evidence from developed and developing economies.

Abstract

This paper investigates the unit root properties of electricity consumption per capita for the 67 developed and developing countries for 1971-2007 period. To examine the stationary properties of electricity consumption per capita, we have adopted Lee and Strazicich (2003, 2004) test of unit root that allows us to test for at most two endogenous breaks and uses the Lagrange Multiplier (LM) test statistics. Results show that 65 country series reject the unit root null hypothesis except for 2 country series. Thus, our empirical findings provide significant evidence that electricity consumption per capita is stationary in almost all countries considered in the study. The stationarity of electricity consumption per capita indicates that it should be possible for the series to forecast future movements in the energy consumption based on the past behaviors of the series.

• Item Type: MPRA Paper
• Language: English
• Keywords: Electricity, Transitory, Permanent
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy

References

Lee C-C, Chang C-P. Structural breaks, energy consumption, and economic growth revisited: Evidence from Taiwan. Energy Economics 2005; 27: 857-872.

Al-Iriani MA. Energy–GDP relationship revisited: an example from GCC countries using panel causality. Energy Policy 2006; 34: 3342-3350.

Chen PF, Lee CC. Is energy consumption per capita broken stationary? New evidence from regional-based panels. Energy Policy 2007; 35: 3526-3540.

Narayan PK, Smyth R. Are shocks to energy consumption permanent or transitory? Evidence from 182 countries. Energy Policy 2007; 35: 333-341.

Hsu YC, Lee CC, Lee CC. Revisited: are shocks to energy consumption permanent or transitory? New evidence from a panel SURADF approach. Energy Economics 2008; 30: 2314-2330.

Lean HH, Smyth R, Long memory in US disaggregated petroleum consumption: evidence from univariate and multivariate LM tests for fractional integration. Energy Policy 2009; 37: 3205-3211.

Mishra V, Sharma S, Smyth R. Are fluctuations in energy consumption per capita transitory? Evidence from a panel of pacific island countries. Energy Policy 2009; 37: 2318-2326.

Apergis N, Loomis D, Payne JE. Are fluctuations in coal consumption transitory or permanent? Evidence from a panel of US states. Applied Energy 2010a; 87: 2424-26.

Apergis N, Loomis D, Payne JE. Are shocks to natural gas consumption temporary or permanent? Evidence from a panel of US states. Energy Policy 2010b; 38: 4734-36.

Narayan PK, Narayan S, Popp S. Energy consumption at the state level: the unit root null hypothesis from Australia. Applied Energy 2010; 85: 1082-1089.

Ozturk I, Aslan A. Are fluctuations in energy consumption per capita transitory? Evidence from Turkey. Energy, Exploration & Exploitation 2011; 29: 161-68.

Hasanov M, Telatar E. A re-examination of stationarity of energy consumption: evidence from new unit root tests. Energy Policy 2011; 39: 7726-38.

Aslan A. Does natural gas consumption follow a nonlinear path over time? Evidence from 50 states? Renewable and Sustainable Energy Reviews 2011; 15: 4466-69.

Aslan A, Kum H. The stationarity of energy consumption for Turkish disaggregate data by employing linear and nonlinear unit root tests. Energy 2011; 36: 4256-58.

Kula F, Aslan A, Ozturk I. Is per capita electricity consumption stationary? time series evidence from OECD countries. Renewable and Sustainable Energy Reviews 2012; 16:501-03.

Zivot E, Andrews D, Further evidence on the great crash, the oil price shock, and the unit root hypothesis. Journal of Business and Economic Statistics 1992; 10: 936-954.

Narayan PK, Narayan S, Smyth R. Are oil shocks permanent or temporary? Panel data evidence from crude oil and NGL production in 60 countries. Energy Economics 2008; 30: 919-936.

Lee J, Strazicich MC. Minimum Lagrange multiplier unit root test with two structural breaks. Review of Economics and Statistics 2003; 85: 1082-89.

Kapetanios G, Shin Y, Snell A. Testing for a unit root in the nonlinear STAR framework. Journal of Econometrics 2003; 112: 359-379.

Dickey DA, Fuller WA. Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association 1979; 74: 427-31.

Phillips P, Perron P, Testing for a unit root in time series regression. Biometrica 1988;75: 333-46.

Perron P. Testing for a unit root in a time series with a changing mean. Journal of Business & Economic Statistics 1990; 8: 153-162.

Lee J, Strazicich MC. Minimum LM Unit Root Test with One Structural Break. Working Papers 04-17, 2004; Department of Economics, Appalachian State University.