IDEAS home Printed from https://ideas.repec.org/p/pre/wpaper/201636.html
   My bibliography  Save this paper

Structural Breaks in Renewable Energy in South Africa: A Bai and Perron Break Test Application

Author

Listed:
  • Jaco P. Weideman

    (Department of Economics, University of Pretoria)

  • Roula Inglesi-Lotz

    (Department of Economics, University of Pretoria)

Abstract

South Africa has been struggling to cope with its energy demand. In order to remedy the problem, the government of South Africa has committed itself to pursuing renewable energy as a viable alternative to traditional sources such as fossil fuels. The aim of this study is to understand whether or not the policies pursued by the South African government in the period 1990-2010 have had any effect on the behaviour of consumers and producers of renewable energy. To this end, the Bai and Perron (1998, 2003) break test methodology is employed to understand how renewable energy production and consumption series have evolved over this period. Deviations from the base case are then explained in the South African economic and policy context.

Suggested Citation

  • Jaco P. Weideman & Roula Inglesi-Lotz, 2016. "Structural Breaks in Renewable Energy in South Africa: A Bai and Perron Break Test Application," Working Papers 201636, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201636
    as

    Download full text from publisher

    File URL: http://www.up.ac.za/media/shared/61/WP/wp_2016_36.zp85751.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kumar Narayan, Paresh & Smyth, Russell, 2007. "Are shocks to energy consumption permanent or temporary? Evidence from 182 countries," Energy Policy, Elsevier, vol. 35(1), pages 333-341, January.
    2. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    3. Chen, Pei-Fen & Lee, Chien-Chiang, 2007. "Is energy consumption per capita broken stationary? New evidence from regional-based panels," Energy Policy, Elsevier, vol. 35(6), pages 3526-3540, June.
    4. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    5. Couture, Toby & Gagnon, Yves, 2010. "An analysis of feed-in tariff remuneration models: Implications for renewable energy investment," Energy Policy, Elsevier, vol. 38(2), pages 955-965, February.
    6. Junsoo Lee & Mark C. Strazicich, 2003. "Minimum Lagrange Multiplier Unit Root Test with Two Structural Breaks," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1082-1089, November.
    7. Mensi, Walid & Hammoudeh, Shawkat & Yoon, Seong-Min, 2014. "How do OPEC news and structural breaks impact returns and volatility in crude oil markets? Further evidence from a long memory process," Energy Economics, Elsevier, vol. 42(C), pages 343-354.
    8. Maddala, G S & Wu, Shaowen, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-652, Special I.
    9. Madubansi, M. & Shackleton, C.M., 2006. "Changing energy profiles and consumption patterns following electrification in five rural villages, South Africa," Energy Policy, Elsevier, vol. 34(18), pages 4081-4092, December.
    10. Pegels, Anna, 2010. "Renewable energy in South Africa: Potentials, barriers and options for support," Energy Policy, Elsevier, vol. 38(9), pages 4945-4954, September.
    11. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    12. del Ri­o González, Pablo, 2008. "Ten years of renewable electricity policies in Spain: An analysis of successive feed-in tariff reforms," Energy Policy, Elsevier, vol. 36(8), pages 2907-2919, August.
    13. Hasanov, Mübariz & Telatar, Erdinc, 2011. "A re-examination of stationarity of energy consumption: Evidence from new unit root tests," Energy Policy, Elsevier, vol. 39(12), pages 7726-7738.
    14. David H. Papell & Christian J. Murray & Hala Ghiblawi, 2000. "The Structure of Unemployment," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 309-315, May.
    15. Smyth, Russell, 2013. "Are fluctuations in energy variables permanent or transitory? A survey of the literature on the integration properties of energy consumption and production," Applied Energy, Elsevier, vol. 104(C), pages 371-378.
    16. Lean, Hooi Hooi & Smyth, Russell, 2013. "Are fluctuations in US production of renewable energy permanent or transitory?," Applied Energy, Elsevier, vol. 101(C), pages 483-488.
    17. Josep Lluís Carrion-i-Silvestre & Tomás del Barrio-Castro & Enrique López-Bazo, 2005. "Breaking the panels: An application to the GDP per capita," Econometrics Journal, Royal Economic Society, vol. 8(2), pages 159-175, July.
    18. Kaddour Hadri, 2000. "Testing for stationarity in heterogeneous panel data," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 148-161.
    19. Liming, Huang, 2009. "Financing rural renewable energy: A comparison between China and India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(5), pages 1096-1103, June.
    20. Pousa, Gabriella P.A.G. & Santos, Andre L.F. & Suarez, Paulo A.Z., 2007. "History and policy of biodiesel in Brazil," Energy Policy, Elsevier, vol. 35(11), pages 5393-5398, November.
    21. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
    22. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    23. Robin L. Lumsdaine & David H. Papell, 1997. "Multiple Trend Breaks And The Unit-Root Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 212-218, May.
    24. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    25. Liddle, Brantley, 2012. "Breaks and trends in OECD countries' energy–GDP ratios," Energy Policy, Elsevier, vol. 45(C), pages 502-509.
    26. Robert Sollis, 2004. "Asymmetric adjustment and smooth transitions: a combination of some unit root tests," Journal of Time Series Analysis, Wiley Blackwell, vol. 25(3), pages 409-417, May.
    27. Bhaskara Rao, B. & Rao, Gyaneshwar, 2009. "Structural breaks and energy efficiency in Fiji," Energy Policy, Elsevier, vol. 37(10), pages 3959-3966, October.
    28. Kristofersson, Dadi & Anderson, James L., 2006. "Is there a relationship between fisheries and farming? Interdependence of fisheries, animal production and aquaculture," Marine Policy, Elsevier, vol. 30(6), pages 721-725, November.
    29. Paolo Agnolucci & Andrew Venn, 2011. "Industrial energy intensities in the UK: is there a deterministic or stochastic difference among sectors?," Applied Economics, Taylor & Francis Journals, vol. 43(12), pages 1447-1462.
    30. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    31. Davis, Mark, 1998. "Rural household energy consumption : The effects of access to electricity--evidence from South Africa," Energy Policy, Elsevier, vol. 26(3), pages 207-217, February.
    32. Schmidt, Peter & Phillips, C B Peter, 1992. "LM Tests for a Unit Root in the Presence of Deterministic Trends," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 257-287, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bashir Olayinka Kolawole, 2021. "Fiscal Stability and Macroeconomic Environment in Nigeria: A Further Assessment," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 17(02), pages 53-66.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Smyth, Russell, 2013. "Are fluctuations in energy variables permanent or transitory? A survey of the literature on the integration properties of energy consumption and production," Applied Energy, Elsevier, vol. 104(C), pages 371-378.
    2. Shahbaz, Muhammad & Khraief, Naceur & Mahalik, Mantu Kumar & Zaman, Khair Uz, 2014. "Are fluctuations in natural gas consumption per capita transitory? Evidence from time series and panel unit root tests," Energy, Elsevier, vol. 78(C), pages 183-195.
    3. Weideman, J. & Inglesi-Lotz, R. & Van Heerden, J., 2017. "Structural breaks in renewable energy in South Africa: A Bai & Perron break test application," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 945-954.
    4. Lean, Hooi Hooi & Smyth, Russell, 2013. "Will policies to promote renewable electricity generation be effective? Evidence from panel stationarity and unit root tests for 115 countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 371-379.
    5. Lee, Chien-Chiang & Ranjbar, Omid & Lee, Chi-Chuan, 2021. "Testing the persistence of shocks on renewable energy consumption: Evidence from a quantile unit-root test with smooth breaks," Energy, Elsevier, vol. 215(PB).
    6. Schneider, Nicolas & Strielkowski, Wadim, 2023. "Modelling the unit root properties of electricity data—A general note on time-domain applications," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 618(C).
    7. Meng, Ming & Payne, James E. & Lee, Junsoo, 2013. "Convergence in per capita energy use among OECD countries," Energy Economics, Elsevier, vol. 36(C), pages 536-545.
    8. repec:ipg:wpaper:2014-589 is not listed on IDEAS
    9. Giorgio Canarella & Rangan Gupta & Stephen M. Miller & Stephen K. Pollard, 2019. "Unemployment rate hysteresis and the great recession: exploring the metropolitan evidence," Empirical Economics, Springer, vol. 56(1), pages 61-79, January.
    10. Lean, Hooi Hooi & Smyth, Russell, 2014. "Will initiatives to promote hydroelectricity consumption be effective? Evidence from univariate and panel LM unit root tests with structural breaks," Energy Policy, Elsevier, vol. 68(C), pages 102-115.
    11. Ozcan, Burcu & Ozturk, Ilhan, 2016. "A new approach to energy consumption per capita stationarity: Evidence from OECD countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 332-344.
    12. Tolga Omay & Muhammad Shahbaz & Chris Stewart, 2021. "Is there really hysteresis in the OECD unemployment rates? New evidence using a Fourier panel unit root test," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(4), pages 875-901, November.
    13. Qaiser Munir & Sook Ching Kok & Kasim Mansur, 2019. "External Shocks, Structural Breaks And Unemployment Hysteresis In Selected Asian Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(03), pages 575-600, June.
    14. Mishra, Vinod & Sharma, Susan & Smyth, Russell, 2009. "Are fluctuations in energy consumption per capita transitory? Evidence from a panel of Pacific Island countries," Energy Policy, Elsevier, vol. 37(6), pages 2318-2326, June.
    15. Oluwasola E Omoju & Jinkai Li & Jin Zhang & Abdul Rauf & Victor Edem Sosoo, 2020. "Implications of shocks in energy consumption for energy policy in sub-Saharan Africa," Energy & Environment, , vol. 31(6), pages 1077-1097, September.
    16. Omay, Tolga & Shahbaz, Muhammad & Stewart, Chris, 2021. "Is There Really Hysteresis in OECD Countries’ Unemployment Rates? New Evidence Using a Fourier Panel Unit Root Test," MPRA Paper 107691, University Library of Munich, Germany, revised 10 May 2021.
    17. Yifei Cai & Cosimo Magazzino, 2019. "Are shocks to natural gas consumption transitory or permanent? A more powerful panel unit root test on the G7 countries," Natural Resources Forum, Blackwell Publishing, vol. 43(2), pages 111-120, May.
    18. Muhammad Shahbaz & Aviral Kumar Tiwari & Saleheen Khan, 2016. "Is energy consumption per capita stationary? Evidence from first and second generation panel unit root tests," Economics Bulletin, AccessEcon, vol. 36(3), pages 1656-1669.
    19. Smyth, Russell & Narayan, Paresh Kumar, 2015. "Applied econometrics and implications for energy economics research," Energy Economics, Elsevier, vol. 50(C), pages 351-358.
    20. repec:ebl:ecbull:v:3:y:2007:i:23:p:1-15 is not listed on IDEAS
    21. Durusu-Ciftci, Dilek & Ispir, M. Serdar & Kok, Dundar, 2019. "Do stock markets follow a random walk? New evidence for an old question," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 165-175.
    22. Apergis, Nicholas & Loomis, David & Payne, James E., 2010. "Are shocks to natural gas consumption temporary or permanent? Evidence from a panel of U.S. states," Energy Policy, Elsevier, vol. 38(8), pages 4734-4736, August.

    More about this item

    Keywords

    Renewable energy; policy analysis; Bai and Perron; breakpoint;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pre:wpaper:201636. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rangan Gupta (email available below). General contact details of provider: https://edirc.repec.org/data/decupza.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.