Electricity consumption-economic growth Nexus: An aggregated and disaggregated causality analysis in India and Pakistan

Faisal Abbas and Nirmalya Choudhury

Journal of Policy Modeling, 2013, vol. 35, issue 4, 538-553

Abstract: This paper empirically examined the causality between electricity consumption and economic growth in two densely populated countries in South Asia, India and Pakistan. The causality analysis was estimated at aggregated and disaggregated level where the focus of the analysis was on the agricultural sector. The disaggregated causality analysis indicated a bi-directional causality between the agricultural electricity consumption and the agricultural GDP in India, while in Pakistan the causality was found to run from agricultural GDP to agricultural electricity consumption. At the aggregated level, India confirmed conservation hypothesis while Pakistan confirmed feedback hypothesis. From the public policy point of view, it can be inferred that, at the macro level, any electricity conservation measures in India will not have an affect on India's increasing economic growth prospects and hence a policy-favourite supply-enhancement strategy in the form of increasing electricity generation needs to be balanced with a demand-management strategy. In case of Pakistan any such policy recommendation is difficult given the bidirectional nature of causality.

Keywords: Electricity consumption; Agriculture growth; Causality; Error Correction Modelling; India; Pakistan (search for similar items in EconPapers)
JEL-codes: C22 C52 Q10 Q43 Q48 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (65)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0161893812000956
Full text for ScienceDirect subscribers only

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:eee:jpolmo:v:35:y:2013:i:4:p:538-553

DOI: 10.1016/j.jpolmod.2012.09.001

Access Statistics for this article

Journal of Policy Modeling is currently edited by A. M. Costa

More articles in Journal of Policy Modeling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().