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Electricity Demand in Pakistan: A Nonlinear Estimation


  • Saima Nawaz

    (COMSATS Institute of Information Technology, Islamabad)

  • Nasir Iqbal

    (Pakistan Institute of Development Economics (PIDE), Islamabad)

  • Saba Anwar

    (Pakistan Institute of Development Economics (PIDE), Islamabad)


This study attempts to estimate the electricity demand function for Pakistan using smooth transition autoregressive model over the period 1971-2012. The empirical results have shown that there is nonlinear relationship between electricity consumption and economic growth and also between electricity prices and consumption. The income elasticity of electricity is high while price elasticity is less than unity. Further, results have shown that the average real prices are below the optimal level. The weak relationship between electricity demand and electricity prices is primarily due to lack of alternatives for electricity. Continuous investment in power sector is required to fulfill the future electricity needs

Suggested Citation

  • Saima Nawaz & Nasir Iqbal & Saba Anwar, 2013. "Electricity Demand in Pakistan: A Nonlinear Estimation," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 52(4), pages 479-492.
  • Handle: RePEc:pid:journl:v:52:y:2013:i:4:p:479-492

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    Cited by:

    1. repec:ipg:wpaper:2014-514 is not listed on IDEAS
    2. Hussain, Anwar & Rahman, Muhammad & Memon, Junaid Alam, 2016. "Forecasting electricity consumption in Pakistan: the way forward," Energy Policy, Elsevier, vol. 90(C), pages 73-80.
    3. Bouoiyour, Jamal & Selmi, Refk & Shahbaz, Muhammad, 2014. "The Electricity Consumption in a Rentier State: Do Institutions Matter?," MPRA Paper 55412, University Library of Munich, Germany.
    4. repec:pid:journl:v:55:y:2016:i:4:p:605-618 is not listed on IDEAS
    5. Valasai, Gordhan Das & Uqaili, Muhammad Aslam & Memon, HafeezUr Rahman & Samoo, Saleem Raza & Mirjat, Nayyar Hussain & Harijan, Khanji, 2017. "Overcoming electricity crisis in Pakistan: A review of sustainable electricity options," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 734-745.


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