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Electricity Consumption and Economic Growth: A Linear and Nonlinear Causality Investigation for Turkey

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  • Maria Pempetzoglou

    (Department of Social Administration and Political Science, Democritus University of Thrace, Greece.)

Abstract

This paper aims to explore the potential linear and nonlinear causal relationship between electricity consumption and economic growth in Turkey during the time period 1945-2006. The study employs the standard linear Granger causality test and the nonparametric Diks and Panchenko causality test. Electricity consumption is disaggregated into residential and commercial electricity consumption, government offices, street illumination, industrial and other activities electricity consumption, in order to determine the sources of both linearity and nonlinearity. The findings provide evidence for the existence of a unidirectional nonlinear causality between income and electricity consumption at the aggregate level. The results also support the presence of a unidirectional linear flow running from economic growth towards residential, commercial and street illumination electricity consumption as well as a unidirectional nonlinear flow running from the residential and commercial electricity consumption towards economic growth and from income to electricity consumption for street illumination. Policies should focus on promoting electricity consumption, especially in the residential and commercial sectors to drive economic growth.

Suggested Citation

  • Maria Pempetzoglou, 2014. "Electricity Consumption and Economic Growth: A Linear and Nonlinear Causality Investigation for Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 263-273.
    • Handle: RePEc:eco:journ2:2014-02-16
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    4. Adeyemi A. Ogundipe & Opeyemi Akinyemi & Oluwatomisin M. Ogundipe, 2016. "Electricity Consumption and Economic Development in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 6(1), pages 134-143.
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    6. Rajesh Sharma & Pradeep Kautish & Dhyani Mehta, 2024. "Determining Energy Consumption Function under Nonlinearity and Structural Break in India: An Empirical Investigation," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 22(2), pages 339-363, June.
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    8. Mudassir Zaman & Farzana Shaheen & Azad Haider & Sadia Qamar, 2015. "Examining Relationship between Electricity Consumption and its Major Determinants in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 998-1009.
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    10. Rajkumari, Laxmi & Gayithri, K., 2018. "Performance Analysis of Karnataka Power Sector in India in the Context of Power Sector Reforms," Energy Policy, Elsevier, vol. 115(C), pages 385-396.
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    More about this item

    Keywords

    electricity consumption; economic growth; linear and nonlinear Granger causality;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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