ARE SHOCKS TO ELECTRICITY CONSUMPTION PERMANENT OR TRANSITORY? EVIDENCE FROM A PANEL STATIONARITY TEST WITH GRADUAL STRUCTURAL BREAKS FOR 25 OECD COUNTRIES

Jamal Husein and S. Murat Kara

Applied Econometrics and International Development, 2023, vol. 23, issue 1, 57-76

Abstract: This study re-examines the stationarity properties of per capita electricity consumption for 25 OECD countries during the 1960-2014 period. We apply a newly developed panel stationarity test that models structural shifts as a gradual process via a Fourier function. This Fourier panel stationarity test takes cross-sectional dependence into account and allows heterogeneity across cross-sections in the panel. However, rather than assuming the presence of a structural shift or a nonlinear deterministic component, we formally test the linearity hypothesis of each time-series utilizing a novel test. Moreover, for robustness check, we apply a panel stationarity test incorporating abrupt structural breaks and employ several new panel stationarity tests that complement the Fourier panel test. For the period of study, we find strong empirical evidence supporting stationarity of per capita electricity consumption for the 25 OECD countries. Therefore, shocks to electricity consumption will have a transitory effect as per capita electricity consumption will, after a shock, return to its long-run trend path.

Keywords: Electricity consumption; OECD; Structural breaks; Fourier approximation; Panel stationarity tests (search for similar items in EconPapers)
JEL-codes: C20 C22 C23 O53 O55 Q4 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.usc.es/~economet/reviews/aeid2313.pdf
No

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eaa:aeinde:v:23:y:2023:i:1_3

Ordering information: This journal article can be ordered from
http://www.usc.es/economet/info.htm

Access Statistics for this article

More articles in Applied Econometrics and International Development from Euro-American Association of Economic Development
Bibliographic data for series maintained by M. Carmen Guisan ().