Energy Demand in South Africa: Is it Asymmetric?

The electricity demand in South Africa has experienced vast changes both from a policy point of view but also due to the country’s great industrialisation and urbanisation. The literature dealing with the South African electricity case, to date, has not taken into account these changes and their effect to the symmetric behaviour of the residential and industrial electricity consumers. Hence, this paper aims at examining the asymmetric behaviour of the annual South African electricity demand (total, residential and non-residential) for the period 1960 to 2012. To do so, three different tests were used: the entropy test proposed by Racine and Maasoumi (2007, 2008), the conditional symmetry test proposed by Bai and Ng (2001), and the Triples test proposed by Randles et al. (1980). The findings showed that there is weak evidence of asymmetry, given that the null hypothesis of symmetry can only be rejected at 10% level of significance. Hence, econometric models examining the South African electricity demand during the same period are credible in their assumption of a linear data generating process.