Evidence on the stationarity of electricity consumption in India

Nhan Tran, Naresh Chandra Sahu and Chon Van Le

Utilities Policy, 2024, vol. 88, issue C

Abstract: This research reevaluates the stationarity of sectoral electricity consumption in a panel of 18 Indian states. We use a novel panel unit root test with an allowance for structural breaks and cross-sectional dependence. The usual univariate unit root test, which accounts for structural breaks but not cross-dependence, rejects the null hypothesis of a unit root in all states under investigation. When we incorporate structural breaks and cross-sectional dependence, the null hypothesis's rejections significantly decrease. Electricity consumption appears nonstationary in many states across all sectors, suggesting that policy changes can have long-term effects.

Keywords: Electricity consumption; Stationarity; Structural breaks; Cross-sectional dependence (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:88:y:2024:i:c:s0957178724000596

DOI: 10.1016/j.jup.2024.101766

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