Aggregate demand for electricity in South Africa: An analysis using the bounds testing approach to cointegration
Electricity demand in South Africa has grown at a very rapid rate over the past decade. As part of reform initiatives to enhance long-term sustainability of the country's electricity industry, South Africa's authorities have in recent years sought to develop an electricity pricing framework that is cost reflective and forms the cornerstone of demand management schemes meant to foster changes in consumption behaviour and enhance efficiency in resource use. The effects of any pricing policy on aggregate electricity consumption will depend on a useful understanding of the factors that influence electricity demand, and the magnitude to which electricity demand responds to changes in such factors. In this context, this paper applies the bounds testing approach to cointegration within an autoregressive distributed lag framework to examine the aggregate demand for electricity in South Africa during the period 1960-2007. The results indicate that in the long run, income is the main determinant of electricity demand. With electricity prices having an insignificant effect on aggregate electricity demand, future pricing policies will need to ensure that electricity prices are cost reflective and enhance efficiency of electricity supply and use.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Henry S. Foster, Jr. & Bruce R. Beattie, 1979. "Urban Residential Demand for Water in the United States," Land Economics, University of Wisconsin Press, vol. 55(1), pages 43-58.
- Dolado, Juan J & Jenkinson, Tim & Sosvilla-Rivero, Simon, 1990. " Cointegration and Unit Roots," Journal of Economic Surveys, Wiley Blackwell, vol. 4(3), pages 249-73.
- Massimo Filippini, 1999. "Swiss residential demand for electricity," Applied Economics Letters, Taylor & Francis Journals, vol. 6(8), pages 533-538.
- Glauco De Vita & Klaus Endresen & Lester C Hunt, 2005.
"An Empirical Analysis of Energy Demand in Namibia,"
Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS)
110, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
- Akinboade, Oludele A. & Ziramba, Emmanuel & Kumo, Wolassa L., 2008. "The demand for gasoline in South Africa: An empirical analysis using co-integration techniques," Energy Economics, Elsevier, vol. 30(6), pages 3222-3229, November.
- Kamerschen, David R. & Porter, David V., 2004. "The demand for residential, industrial and total electricity, 1973-1998," Energy Economics, Elsevier, vol. 26(1), pages 87-100, January.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
- Bentzen, Jan & Engsted, Tom, 2001.
"A revival of the autoregressive distributed lag model in estimating energy demand relationships,"
Elsevier, vol. 26(1), pages 45-55.
- Bentzen, J. & Engsted, T., 1999. "A Revival of the Autoregressive Distributed Lag Model in Estimating Energy Demand Relationships," Papers 99-7, Aarhus School of Business - Department of Economics.
- Halicioglu, Ferda, 2007. "Residential electricity demand dynamics in Turkey," Energy Economics, Elsevier, vol. 29(2), pages 199-210, March.
- Al-Faris, Abdul Razak F., 2002. "The demand for electricity in the GCC countries," Energy Policy, Elsevier, vol. 30(2), pages 117-124, January.
- Zachariadis, Theodoros & Pashourtidou, Nicoletta, 2007. "An empirical analysis of electricity consumption in Cyprus," Energy Economics, Elsevier, vol. 29(2), pages 183-198, March.
- Beenstock, Michael & Goldin, Ephraim & Nabot, Dan, 1999. "The demand for electricity in Israel," Energy Economics, Elsevier, vol. 21(2), pages 168-183, April.
- Ziramba, Emmanuel, 2008. "The demand for residential electricity in South Africa," Energy Policy, Elsevier, vol. 36(9), pages 3460-3466, September.
- Wolde-Rufael, Yemane, 2005. "Energy demand and economic growth: The African experience," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 891-903, November.
- Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
- M. Bahmani-Oskooee & Gour Goswami, 2003. "A disaggregated approach to test the J-Curve phenomenon: Japan versus her major trading partners," Journal of Economics and Finance, Springer, vol. 27(1), pages 102-113, March.
- Louw, Kate & Conradie, Beatrice & Howells, Mark & Dekenah, Marcus, 2008. "Determinants of electricity demand for newly electrified low-income African households," Energy Policy, Elsevier, vol. 36(8), pages 2814-2820, August.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- Masayasu Ishguro & Takamasa Akiyama, 1995. "Electricity demand in Asia and the effects on energy supply and the investment environment," Policy Research Working Paper Series 1557, The World Bank.
- Dergiades, Theologos & Tsoulfidis, Lefteris, 2008. "Estimating residential demand for electricity in the United States, 1965-2006," Energy Economics, Elsevier, vol. 30(5), pages 2722-2730, September.
- Silk, Julian I. & Joutz, Frederick L., 1997. "Short and long-run elasticities in US residential electricity demand: a co-integration approach," Energy Economics, Elsevier, vol. 19(4), pages 493-513, October.
- Narayan, Paresh Kumar & Smyth, Russell, 2005. "The residential demand for electricity in Australia: an application of the bounds testing approach to cointegration," Energy Policy, Elsevier, vol. 33(4), pages 467-474, March.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:37:y:2009:i:10:p:4167-4175. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.