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A Panel Data Analysis of the Demand for Electricity in Canada
Author(s) -
Latif Ehsan
Publication year - 2015
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/1759-3441.12103
Subject(s) - per capita , electricity , economics , panel data , econometrics , consumption (sociology) , error correction model , ordinary least squares , real gross domestic product , gross domestic product , causality (physics) , panel analysis , agricultural economics , cointegration , macroeconomics , engineering , demography , population , social science , physics , quantum mechanics , sociology , electrical engineering
The article uses panel data from the Statistics Canada (1983–2010) to examine the determinants of electricity consumption in Canada. The estimations from the Fully Modified Ordinary Least square ( OLS ) and Dynamic OLS models suggest that per capita real Gross Domestic Production (GDP) has a significant positive while electricity price has a negative, but insignificant impact on per capita electricity consumption. The study uses Panel Vector Error Correction Model ( VECM ) to examine long and short run causality among the variables. The Panel VECM results suggest that there is a long run causal relationship among electricity consumption, real GDP and electricity price. The Panel VECM results further suggest that unidirectional short run causality runs from per capita real GDP to per capita electricity consumption.