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Analysing the Industrial Electricity Demand for Turkey

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  • Ismail Kavaz

    (Bingol University)

Abstract

This study analyses the effects of some selected parameters on Turkey’s industrial electricity demand by using annual data between 1978 and 2018. In this regard, the Autoregressive Distributed Lag (ARDL) Bounds Testing method is utilized for establishing the models. The variables that used in the models of this study are electricity consumption, industrial value added, price of electricity, urbanization rate and average air temperature. According to the empirical findings, the price elasticities are estimated negative as expected which are -0.14 and -0.18 for the short and long term, respectively. On the other hand, the income elasticities have positive signs and computed as statistically significant. The short and long run income elasticities of industrial electricity demand are found as 0,15 and 0,35, respectively. Additionally, the urbanization rate and air temperature positively affect the industrial electricity demand of Turkey. These results indicate that the estimated price and income elasticities for the Turkish industrial electricity demand are very low and smaller than 1 in absolute terms. Therefore, it can be said that an increase and/or decrease in price and income as percentage is more than increase in electricity consumption for the industrial sector. In addition, these results imply that since the electricity usage in Turkey’s industrial sector is a necessity, consumers are not changing their consumption behaviour easily with respect to the price and income movements

Suggested Citation

  • Ismail Kavaz, 2020. "Analysing the Industrial Electricity Demand for Turkey," Bingol University Journal of Economics and Administrative Sciences, Bingol University, Faculty of Economics and Administrative Sciences, vol. 4(2), pages 187-218, December.
    • Handle: RePEc:bgo:journl:v:4:y:2020:i:2:p:187-218repec/bgo/
    DOI: https://dx.doi.org/10.33399/biibfad.761687
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    References listed on IDEAS

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    JEL classification:

    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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