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Estimation of electricity demand function for Algeria: revisit of time series analysis

Khraief, Naceur and Shahbaz, Muhammad and Mallick, Hrushikesh and Loganathan, Nanthakumar (2016) Estimation of electricity demand function for Algeria: revisit of time series analysis. Renewable and Sustainable Energy Reviews . ISSN 1364-0321 (In Press)

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Abstract

This paper aims to empirically re-examine whether economic growth has effect on electricity consumption for Algerian economy. We have incorporated urbanization and trade openness in electricity demand function as additional determinants of electricity consumption for the period of 1971-2012. For empirical purpose, we have applied the recently developed combined cointegration test proposed by Bayer and Hanck (2013) and bounds testing approach to cointegration by Pesaran et al. (2001) for establishing the cointegration between the variables by accommodating structural breaks.The results expose that income growth leads to higher electricity demand along with urbanization being another major contributing factor of rising electricity demand. In contrast, trade openness leads to reduce electricity demand. The causal association between the variables is further examined with the application of innovation accounting approach of Vector Autoregressive (VAR). The empirical evidence indicates the presence of the neutral effect between income growth and electricity use. Urbanization causes electricity use and electricity use causes urbanization in Granger sense.

Item Type:Article
Uncontrolled Keywords:Electricity, Growth, Trade openness, Urbanization
Subjects:H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions:Management
ID Code:72830
Deposited By: Fahmi Mokhsen
Deposited On:20 Nov 2017 16:14
Last Modified:20 Nov 2017 16:14

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