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A Dynamic Model of Industrial Energy Demand in Kenya

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  • Semboja Haji Hatibu Haji

Abstract

This paper analyses the effects of input price movements, technology changes, capacity utilization and dynamic mechanisms on energy demand structures in the Kenyan industry. This is done with the help of a variant of the second generation dynamic factor demand (econometric) model. This interrelated disequilibrium dynamic input demand econometric model is based on a long-term cost function representing production function possibilities and takes into account the asymmetry between variable inputs (electricity, other-fuels and labour) and quasi-fixed input (capital) by imposing restrictions on the adjustment process. Variations in capacity utilization and slow substitution process invoked by the relative input price movement justifies the nature of input demand disequilibrium. The model is estimated on two ISIC digit Kenyan industry time series data (1961 - 1988) using the Iterative Zellner generalized least square method.

Suggested Citation

  • Semboja Haji Hatibu Haji, 1994. "A Dynamic Model of Industrial Energy Demand in Kenya," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 203-224.
    • Handle: RePEc:aen:journl:1994v15-04-a10
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    Cited by:

    1. Kohler, Marcel, 2014. "Differential electricity pricing and energy efficiency in South Africa," Energy, Elsevier, vol. 64(C), pages 524-532.
    2. Klug, Thomas W. & Beyene, Abebe D. & Meles, Tensay H. & Toman, Michael A. & Hassen, Sied & Hou, Michael & Klooss, Benjamin & Mekonnen, Alemu & Jeuland, Marc, 2022. "A review of impacts of electricity tariff reform in Africa," Energy Policy, Elsevier, vol. 170(C).
    3. Gamtessa, Samuel & Olani, Adugna Berhanu, 2018. "Energy price, energy efficiency, and capital productivity: Empirical investigations and policy implications," Energy Economics, Elsevier, vol. 72(C), pages 650-666.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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