Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia

<p>The residential sector is the third-largest electricity user in Malaysia. A clear understanding of the rapid growth in its electricity consumption is crucial to the formulation of energy and environmental policy. This study applied the Autoregressive Distributed Lags, Vector Error Correctio...

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Autores principales:	Nor Salwati Othman, Nurul Hezlin Mohamed Hariri
Formato:	article
Lenguaje:	EN
Publicado:	EconJournals 2021
Materias:	Environmental sciences GE1-350 Energy industries. Energy policy. Fuel trade HD9502-9502.5
Acceso en línea:	https://doaj.org/article/94a74d9c1ad4467fbb078c49ca847b9c
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spelling	oai:doaj.org-article:94a74d9c1ad4467fbb078c49ca847b9c2021-11-12T07:27:31ZEstimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia2146-4553https://doaj.org/article/94a74d9c1ad4467fbb078c49ca847b9c2021-11-01T00:00:00Zhttps://econjournals.com/index.php/ijeep/article/view/11727https://doaj.org/toc/2146-4553<p>The residential sector is the third-largest electricity user in Malaysia. A clear understanding of the rapid growth in its electricity consumption is crucial to the formulation of energy and environmental policy. This study applied the Autoregressive Distributed Lags, Vector Error Correction Model, and Variance Decomposition Approach in determining the long-run and short-run interaction between electricity consumption by residential sector and the suggested independent variables for 1980–2020 period. The selection of variables is based on the theory of demand. The outcomes confirmed the existence of a long-run relationship among variables. Also, the significant short-run elasticities of residential electricity consumption due to the changes in income and price. However, there is no significant short-run elasticity of residential electricity consumption due to the changes in occupancy and technology. In terms of causality interaction, results show the unidirectional causality running from electricity consumption, income, technology, and occupancy to electricity price in the long run; and the unidirectional causality running from income and occupancy to electricity price in the short run. The bidirectional causality also exists between electricity consumption and electricity price; and technology and electricity price in the short run. The research findings could be beneficial for policymakers in strengthening long-lasting economic policies.</p><p><strong>Keywords<em>:</em></strong><strong> </strong>residential electricity consumption, technology disruption, ARDL, Malaysia</p><p><strong>JEL Classifications:</strong> O1, O2, Q4, Q5</p><p>DOI: <a href="https://doi.org/10.32479/ijeep.11727">https://doi.org/10.32479/ijeep.11727</a></p>Nor Salwati OthmanNurul Hezlin Mohamed HaririEconJournalsarticleEnvironmental sciencesGE1-350Energy industries. Energy policy. Fuel tradeHD9502-9502.5ENInternational Journal of Energy Economics and Policy, Vol 11, Iss 6, Pp 335-346 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Environmental sciences GE1-350 Energy industries. Energy policy. Fuel trade HD9502-9502.5
spellingShingle	Environmental sciences GE1-350 Energy industries. Energy policy. Fuel trade HD9502-9502.5 Nor Salwati Othman Nurul Hezlin Mohamed Hariri Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia
description	<p>The residential sector is the third-largest electricity user in Malaysia. A clear understanding of the rapid growth in its electricity consumption is crucial to the formulation of energy and environmental policy. This study applied the Autoregressive Distributed Lags, Vector Error Correction Model, and Variance Decomposition Approach in determining the long-run and short-run interaction between electricity consumption by residential sector and the suggested independent variables for 1980–2020 period. The selection of variables is based on the theory of demand. The outcomes confirmed the existence of a long-run relationship among variables. Also, the significant short-run elasticities of residential electricity consumption due to the changes in income and price. However, there is no significant short-run elasticity of residential electricity consumption due to the changes in occupancy and technology. In terms of causality interaction, results show the unidirectional causality running from electricity consumption, income, technology, and occupancy to electricity price in the long run; and the unidirectional causality running from income and occupancy to electricity price in the short run. The bidirectional causality also exists between electricity consumption and electricity price; and technology and electricity price in the short run. The research findings could be beneficial for policymakers in strengthening long-lasting economic policies.</p><p><strong>Keywords<em>:</em></strong><strong> </strong>residential electricity consumption, technology disruption, ARDL, Malaysia</p><p><strong>JEL Classifications:</strong> O1, O2, Q4, Q5</p><p>DOI: <a href="https://doi.org/10.32479/ijeep.11727">https://doi.org/10.32479/ijeep.11727</a></p>
format	article
author	Nor Salwati Othman Nurul Hezlin Mohamed Hariri
author_facet	Nor Salwati Othman Nurul Hezlin Mohamed Hariri
author_sort	Nor Salwati Othman
title	Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia
title_short	Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia
title_full	Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia
title_fullStr	Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia
title_full_unstemmed	Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia
title_sort	estimating the causality and elasticities of residential electricity consumption for malaysia
publisher	EconJournals
publishDate	2021
url	https://doaj.org/article/94a74d9c1ad4467fbb078c49ca847b9c
work_keys_str_mv	AT norsalwatiothman estimatingthecausalityandelasticitiesofresidentialelectricityconsumptionformalaysia AT nurulhezlinmohamedhariri estimatingthecausalityandelasticitiesofresidentialelectricityconsumptionformalaysia
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Estimating the Causality and Elasticities of Residential Electricity Consumption for Malaysia

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