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The demand for electricity in Pakistan

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  • Muhammad Arshad Khan
  • Abdul Qayyum

Abstract

This paper examines the patterns of electricity demand in Pakistan over the period 1970-2006 using autoregressive distributed lag technique to cointegration. Long run and short-run price and income elasticities are examined for the national level and for the three major consumer's categories-households, industry and agriculture. The overall results suggest that income and price elasticities possess expected signs at aggregate and disaggregate levels in the long run as well as in the short run. The error correction terms possess expected negative signs and are highly significant with reasonable magnitudes. Furthermore, the estimated long run and short-run electricity demand functions remains stable over the sample period. The results thus convey important information to the agents operating in the electricity market regarding the pricing policies and helps in planning the future strategy of electricity demand management. Copyright 2009 The Authors. Journal compilation 2009 Organization of the Petroleum Exporting Countries.

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Bibliographic Info

Article provided by Organization of the Petroleum Exporting Countries in its journal OPEC Energy Review.

Volume (Year): 33 (2009)
Issue (Month): 1 (03)
Pages: 70-96

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Handle: RePEc:bla:opecrv:v:33:y:2009:i:1:p:70-96

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Web page: http://onlinelibrary.wiley.com/journal/10.1111/%28ISSN%291753-0237

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Cited by:
  1. Muhammad, Shahbaz & V G R, Chandran & Pervaiz, Azeem, 2011. "Natural gas consumption and economic growth: cointegration, causality and forecast error variance decomposition tests for Pakistan," MPRA Paper 35103, University Library of Munich, Germany, revised 30 Nov 2011.
  2. Muhammad Shahbaz & Mohamed Arouri & Frédéric Teulon, 2014. "Short- and Long-Run Relationships between Natural Gas Consumption and Economic Growth: Evidence from Pakistan," Working Papers 2014-289, Department of Research, Ipag Business School.
  3. Javid, Attiya Yasmin & Muhammad, Javid & Awan, Zahid Ashraf, 2012. "Electricity consumption and economic growth: evidence from Pakistan," MPRA Paper 48011, University Library of Munich, Germany, revised 01 Oct 2012.
  4. Satti, Saqlain Latif & Hassan, Muhammad Shahid & Mahmood, Haider & Shahbaz, Muhammad, 2014. "Coal consumption: An alternate energy resource to fuel economic growth in Pakistan," Economic Modelling, Elsevier, vol. 36(C), pages 282-287.
  5. Farooq, Muhammad Khalid & Kumar, S. & Shrestha, Ram M., 2013. "Energy, environmental and economic effects of Renewable Portfolio Standards (RPS) in a Developing Country," Energy Policy, Elsevier, vol. 62(C), pages 989-1001.
  6. Kumar, Saten & Shahbaz, Muhammad, 2010. "Coal Consumption and Economic Growth Revisited: Structural Breaks, Cointegration and Causality Tests for Pakistan," MPRA Paper 26151, University Library of Munich, Germany.
  7. Noel Alter & Shabib Haider Syed, 2011. "An Empirical Analysis of Electricity Demand in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 1(4), pages 116-139.

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