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Revisiting electricity consumption, price, and real GDP: A modified sectoral level analysis from Pakistan

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  • Abbasi, Kashif Raza
  • Abbas, Jaffar
  • Tufail, Muhammad

Abstract

A sustainable energy mix leads to stable and long-term economic goals in which sectors play an essential role. Therefore, the study explores the relationship between electricity consumption (EC), electricity price (EP), and real GDP at the various sectors and general levels from the period 1970–2018 in Pakistan by using the Johansen Co-integration test and Vector Error Correction Model (VECM). The selected sectors are as follows; agricultural, commercial, industrial, and residential also cumulatively. Each sector regress with EC, EP, GDP, other electricity consumption (OEC), and urbanization population growth (UPG) determinants. The outcomes indicate the long-run relationship between industrial, residential sectors, and cumulative. However, commercial and agricultural sectors also revealed a long-run relationship, while feedback effects were found in EC and EP. Furthermore, the short-run causality found in all sectors except cumulative UPG to GDP, agricultural OEC to EP, commercial, EC to GDP, industrial UPG to EC, and UPG to GDP in residential whereas UPG strongly exogenous effect on the commercial and residential sector and OEC misuse causes the wastage of EC and increasing of price. The research findings could be beneficial for policymakers, and electricity management is essential to strengthening long-lasting economic policies.

Suggested Citation

  • Abbasi, Kashif Raza & Abbas, Jaffar & Tufail, Muhammad, 2021. "Revisiting electricity consumption, price, and real GDP: A modified sectoral level analysis from Pakistan," Energy Policy, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:enepol:v:149:y:2021:i:c:s0301421520307989
    DOI: 10.1016/j.enpol.2020.112087
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