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Residential and non-residential electricity dynamics

Michael P. Tonkovic and Syed Azfar Hussain

Energy Economics, 2017, vol. 64, issue C, 262-271

Abstract: This paper uses U.S. panel data to instrument and examine the dynamics of electricity within the world market while separating between both residential and non-residential electricity consumptions during the time period of 1990–2014. To better assess the true differences within each causal relationship, all panel data has been separated into one Full panel and three subpanels of High, Middle, and Low income. The empirical framework used consists of various tests that identify the existence of cross-sectional dependency, a Pesaran panel unit root test, a Westerlund panel cointegration test, and the Dumitrescu–Hurlin method of the Granger causality test. Furthermore, this paper utilizes DOLS to estimate any long-run elastic relations between real GDP and residential or non-residential electricity consumption. Based on the results, this paper determines that no long-run relationship exists between non-residential electricity consumption and economic growth throughout and that the relationship between residential electricity consumption and economic growth possesses unit elastic behavior in the long run. Other findings throughout imply causality moves from economic growth in the direction of residential electricity consumption for all panels.

Keywords: Electricity consumption; Economic growth; Residential; Non-residential; United States (search for similar items in EconPapers)
JEL-codes: B41 O13 O50 Q41 Q43 Q48 (search for similar items in EconPapers)
Date: 2017
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