Forecasting Domestic Energy Consumption in Taiwan under Economic Shocks: An ARIMA Model Approach

Cheng-Wen Lee and Kuei-Chiang Chen

Advances in Management and Applied Economics, 2025, vol. 15, issue 6, 13

Abstract: This study examines domestic energy consumption in Taiwan under economic shocks, with a focus on the 2008 financial crisis and crude oil price volatility. As Taiwan relies heavily on imported energy, accurate forecasting of consumption is critical for sustainable policy planning. Using monthly data from 2002 to 2019, this research applies autoregressive and ARIMA models to predict long-term demand and assess the impact of external shocks. Results indicate a steady upward trend in energy use with clear seasonal variation, but notable declines occurred during the 2008 oil price surge and financial turmoil, reflecting strong sensitivity to global instability. The AR(1) model shows high explanatory power, with predicted values closely matching observed data, and diagnostic tests confirming model robustness. Findings highlight that while energy demand recovers alongside economic growth, conservation policies during downturns alone are insufficient. The study underscores the importance of improving energy efficiency, diversifying supply, and strengthening carbon-reduction measures to ensure Taiwan’s sustainable energy security.  JEL classification numbers: Q41, Q43, Q48, C22.

Keywords: Energy Consumption; ARIMA Model; Economic Shock; Energy Security. (search for similar items in EconPapers)
Date: 2025
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