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The Cost of Unserved Energy: Evidence from Selected Industrial Cities of Pakistan

Author

Listed:
  • Rehana Siddiqui

    (Pakistan Institute of Development Economics, Islamabad.)

  • Hafiz Hanzla Jalil

    (Pakistan Institute of Development Economics, Islamabad.)

  • Muhammad Nasir

    (Pakistan Institute of Development Economics, Islamabad.)

  • Wasim Shahid Malik

    (Quaid-i-Azam University, Islamabad.)

  • Mahmood Khalid

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

This study is an attempt to explore the cost of unserved energy due to power outages in Pakistan that started in 2007. The study is based on a survey conducted for four major industrial cities of Punjab—Gujrat, Faisalabad, Gujranwala, and Sialkot. In addition to quantification of output losses, the effect on employment, cost of production, and delay in supply orders are also examined. The output loss is quantified using two-dimensional analyses, controlling for variations in the duration of outages and in the shift hours. The survey data reveal that employment has not suffered any significant drop due to alternative energy arrangements. These arrangements, nevertheless, have increased the production cost of the firms. Delays in the delivery of supply orders are also due to energy shortage. The study reports that the total industrial output loss varies between 12 percent and 37 percent, with Punjab as the major affected province.

Suggested Citation

  • Rehana Siddiqui & Hafiz Hanzla Jalil & Muhammad Nasir & Wasim Shahid Malik & Mahmood Khalid, 2011. "The Cost of Unserved Energy: Evidence from Selected Industrial Cities of Pakistan," PIDE-Working Papers 2011:75, Pakistan Institute of Development Economics.
  • Handle: RePEc:pid:wpaper:2011:75
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    References listed on IDEAS

    as
    1. Muhammad Nasir & Wasim Shahid Malik, 2011. "The Contemporaneous Correlation of Structural Shocks and Inflation-Output Variability in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 50(2), pages 145-162.
    2. Luis J. Álvarez & Emmanuel Dhyne & Marco Hoeberichts & Claudia Kwapil & Hervé Le Bihan & Patrick Lünnemann & Fernando Martins & Roberto Sabbatini & Harald Stahl & Philip Vermeulen & Jouko Vilmunen, 2006. "Sticky Prices in the Euro Area: A Summary of New Micro-Evidence," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 575-584, 04-05.
    3. Pasha, Hafiz A. & Ghaus, Aisha & Malik, Salman, 1989. "The economic cost of power outages in the industrial sector of Pakistan," Energy Economics, Elsevier, vol. 11(4), pages 301-318, October.
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    6. Nasir, Muhammad & Ur Rehman, Faiz, 2011. "Environmental Kuznets Curve for carbon emissions in Pakistan: An empirical investigation," Energy Policy, Elsevier, vol. 39(3), pages 1857-1864, March.
    7. Martins, Fernando, 2005. "The price setting behaviour of Portuguese firms: evidence from survey data," Working Paper Series 562, European Central Bank.
    8. Rehana Siddiqui, 2004. "Energy and Economic Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(2), pages 175-200.
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    Citations

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    Cited by:

    1. Shahbaz, Muhammad & Lean, Hooi Hooi, 2012. "The dynamics of electricity consumption and economic growth: A revisit study of their causality in Pakistan," Energy, Elsevier, vol. 39(1), pages 146-153.
    2. repec:pid:wpaper:2012:4 is not listed on IDEAS
    3. Abbas, Malaika, 2016. "The Direct and Indirect Costs of Power Outages to Small Scale Manufacturing Industries of Punjab," MPRA Paper 81264, University Library of Munich, Germany.
    4. Shaikh, Salman, 2014. "Tax Increment Financing in Pakistan," MPRA Paper 53801, University Library of Munich, Germany.
    5. Matthew McCartney, 2014. "The Political Economy of Industrial Policy: A Comparative Study of the Textiles Industry in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 19(Special E), pages 105-134, September.
    6. Afreen Siddiqi & James L. Wescoat, 2013. "Energy use in large-scale irrigated agriculture in the Punjab province of Pakistan," Water International, Taylor & Francis Journals, vol. 38(5), pages 571-586, September.
    7. Afia Malik, 2012. "Power Crisis in Pakistan: A Crisis in Governance?," PIDE Monograph Series 2012:4, Pakistan Institute of Development Economics.
    8. Shakeel, Shah Rukh & Takala, Josu & Shakeel, Waqas, 2016. "Renewable energy sources in power generation in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 421-434.
    9. Kessides, Ioannis N., 2013. "Chaos in power: Pakistan's electricity crisis," Energy Policy, Elsevier, vol. 55(C), pages 271-285.
    10. Khan, Muhammad Arshad & Abbas, Faisal, 2016. "The dynamics of electricity demand in Pakistan: A panel cointegration analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1159-1178.
    11. Javid, Muhammad & Qayyum, Abdul, 2014. "Electricity consumption-GDP nexus in Pakistan: A structural time series analysis," Energy, Elsevier, vol. 64(C), pages 811-817.
    12. Shahbaz, Muhammad, 2015. "Measuring Economic Cost of Electricity Shortage: Current Challenges and Future Prospects in Pakistan," MPRA Paper 67164, University Library of Munich, Germany, revised 12 Oct 2015.
    13. Jamil, Faisal, 2013. "On the electricity shortage, price and electricity theft nexus," Energy Policy, Elsevier, vol. 54(C), pages 267-272.
    14. Mirza, Faisal Mehmood & Kanwal, Afra, 2017. "Energy consumption, carbon emissions and economic growth in Pakistan: Dynamic causality analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 1233-1240.
    15. Kamal A. Munir & Salman Khalid, 2012. "Pakistan’s Power Crisis: How Did We Get Here?," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(Special E), pages 73-82, September.
    16. Shaikh, Salman, 2013. "Global Competitiveness: Challenges & Solutions for Pakistan," MPRA Paper 53796, University Library of Munich, Germany.

    More about this item

    Keywords

    Energy Crises; Output Loss; Pakistan;

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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