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Causal Relationship between Electric Consumption and Economic Growth in South East Sulawesi

Author

Listed:
  • Manat Rahim

    (Department of Economics, Faculty of Economics and Business, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • Pasrun Adam

    (Department of Mathematics, Faculty of Mathematics and Natural Science, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • La Ode Suriadi

    (Department of Economics, Faculty of Economics and Business, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • Zainuddin Saenong

    (Department of Economics, Faculty of Economics and Business, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • Ery Atmodjo

    (Department of Agribusiness, Faculty of Agriculture, Manokwari 98314, Universitas Papua.)

  • Wali Aya Rumbia

    (Department of Economics, Faculty of Economics and Business, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • Irma P. Tamburaka

    (Department of Economics, Faculty of Economics and Business, Universitas Halu Oleo, Kendari 93232, Indonesia,)

Abstract

This study aims to investigate the causal relationship between electric consumption and economic growth in Southeast Sulawesi. Time series of electric consumption and per capita regional gross domestic product data in the period of 1985 to 2016 were used in this study. The causal relationship were examined using an autoregressive distributed lag (ARDL) model and Granger causality test. The tests revealed a strong positive causal relationship between electric consumption and economic growth of Souetheast Sulawesi in the long-run. Each 1% increase in electric consumption would caused 0,31% increase in economic growth. In the short-run, however, weak relationship exists between electric consumption and economic growth. Hence, electric consumption contributes to economic growth of Southeast Sulawesi in the long-run and in the short-run.

Suggested Citation

  • Manat Rahim & Pasrun Adam & La Ode Suriadi & Zainuddin Saenong & Ery Atmodjo & Wali Aya Rumbia & Irma P. Tamburaka, 2018. "Causal Relationship between Electric Consumption and Economic Growth in South East Sulawesi," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 29-34.
    • Handle: RePEc:eco:journ2:2018-06-5
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    References listed on IDEAS

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    Cited by:

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    2. Buyung Romadhoni & Akhmad Akhmad, 2020. "Household Electricity Demand in South Sulawesi, Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 229-233.

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    More about this item

    Keywords

    Electric consumption; economic growth; ARDL model; Granger causality.;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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