Short- and Long-Term Determinants of Residential Electricity Demand in Turkey
DOI:
https://doi.org/10.31436/ijema.v25i3.448Abstract
The purpose of this study is to predict the factors affecting the residential electricity demand by using a multivariate econometric model. The variables of the model established in this context are net electricity consumption in the residential sector, the price of electricity, real income per capita, average air temperature showing the climatic conditions and the urbanization rate. Residential electricity demand was analyzed for short- and long-term with the ARDL-Bound Testing by using the annual data for the years 1990-2014 in Turkey. As a result of the analyses both short- and long-term residential electricity demand was found to be negatively and significantly affected by price of electricity and positively and significantly affected by income, average temperature and urbanization rate. The price elasticity of demand was estimated to be smaller than 1 in both short- and long-term. Although income elasticity of demand was estimated to be smaller than 1 in the short-term, income elasticity of demand was found to be higher than 1 in the long-term. In addition, climatic condition was found to be most effective variable affecting residential electricity demand.
References
Akan, Y., and S. Tak. “Türkiye Elektrik Enerjisi Ekonometrik Talep Analizi.†Journal of Economics and Administrative Sciences 17, no. 1-2 (2003): 21-49.
Akbostanci, E., G.I. Tunc, and S. Turut-Asik. “Türkiye’nin Enerji Talebini Belirleyen Etkenler.†Paper presented at the 11th Turkey Energy Congress. İzmir, Turkey, 21-23 October 2009. http://www.dektmk.org.tr/pdf/enerji_ kongresi_11/57.pdf
Alberini, A., W. Gans, and D. Velez-Lopez. “Residential Consumption of Gas and Electricity in the US: The Role of Prices and Income.†Energy Econonomics 33 (2011): 870-81.
Athukorala, P.P.A.W., and C. Wilson. “Estimating Short and Long-Term Residential Demand for Electricity: New Evidence from Sri Lanka.†Energy Economics 32 (2010): 34-40.
Brown, R.L., J. Durbin, and J.M. Evans. “Techniques for Testing the Constancy of Regression Relations Overtime.†Journal of the Royal Statistical Society 37, no. 13 (1975): 149-63.
Ciarreta, A., and A. Zarraga. “Economic Growth–Electricity Consumption Causality in 12 European Countries: A Dynamic Panel Data Approach.†Energy Policy 38 (2010): 3790-96.
Dickey, D.A., and W.A. Fuller. “Distribution of the Estimators for Autoregressive Time Series with a Unit Root.†Journal of the American Statistical Society 74 (1979): 427-31.
Dickey, D.A., and W.A. Fuller. “Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root.†Econometrica 49, no. 4 (1981): 1057-72.
Dilaver, Z., and L.C. Hunt. “Modelling and Forecasting Turkish Residential Electricity Demand.†Energy Policy 39, no.6 (2011): 3117-27.
Dimitropoulos, J., L.C. Hunt, and G. Judge. “Estimating Underlying Energy Demand Trends Using UK Annual Data.†Applied Economics Letters 12 (2005): 239-44.
Eltony, M.N., and M.A. Al-Awadhi. “Residential Energy demand: a Case Study of Kuwait.†OPEC Review: Energy Economics and Related Issues 31, no. 3 (2007):159-68.
Energy Market Regulatory, Republic of Turkey. Doğal Gaz Piyasası 2014a Yılı Sektör Raporu. www.epdk.org.tr/TR/Dokuman/2500
Energy Market Regulatory, Republic of Turkey. Elektrik Piyasası 2014b Yılı Piyasa Gelişim Raporu. http://www.epdk.org.tr/TR/Dokumanlar/Elektrik/YayinlarRaporlar/ Elektrik Piyasasi Gelisim Raporu
Engle, R.F., and C.W.J. Granger. “Co-integration and Error Correction: Representation, Estimation and Testing.†Econometrica 55 (1987): 251-76.
Esmaeilimoakher, P., T. Urmee, T. Pryor and G. Baverstock. “Identifying the Determinants of Residential Electricity Consumption for Social Housing in Perth, Western Australia.†Energy and Buildings 133 (2016): 403-13.
Filippini, M. “Short- and Long-Run Time-of-Use Price Elasticities in Swiss Residential Electricity Demand.†Energy Policy 39 (2011): 5811-17.
Filippini, M., and S. Pachauri. “Elasticities of Electricity Demand in Urban Indian Households.†Energy Policy 32 (2004): 429-36.
Fisher, F.M., and C.A. Kaysen. A Study in Econometrics: The Demand for Electricity in United States, Amsterdam: North Holland Publishing Co, 1962.
Franco, G. and A.H. Sanstad. “Climate Change and Electricity Demand in California.†Climatic Change 87, no. 1 (2008): 139-51.
Guloglu, B. and E. Akin. “Determinants of the Household Electricity Demand in Turkey: Ordered Logit Approach.†Research Journal of Politics, Economics and Management 2, no. 3 (2014): 1-20.
Guta, F., A. Damte, and T. Ferede. “The Residential Demand for Electricity in Ethiopia, Environment for Development.†Environment for Development Discussion Paper April 2015. http://www.rff.org/files/sharepoint/WorkImages/Download/EfD-DP-15-07.pdf
Halicioglu, F. “Residential Electricity Demand Dynamics in Turkey.†Energy Economics 29 (2007): 199-210.
Halvorsen, B., and B.M. Larsen. “Norwegian Residential Electricity Demand-a Microeconomic Assessment of the Growth from 1976 to 1993.†Energy Policy 29 (2001): 227-36.
Hirst, E., and R. Goeltz. “Comparison of Actual Energy Saving with Audit Predictions for Homes in the North Central Region of the USA.†Building and Environment 20, no. 1 (1985): 1–6.
Holtedahl, P., and F.L. Joutz. “Residential Electricity Demand in Taiwan.†Energy Economics 26 (2004): 201-24.
International Energy Agency. Natural Gas Information 2016, Statistics, International Energy Agency, 2016.
Johansen, S. “Statistical Analysis of Cointegrating Vectors.†Journal of Economic Dynamics and Control 12, no. 2-3 (1988): 231-54.
Johansen, S., and K. Juselius. “Maximum Likelihood Estimation and Inference on Co-integration - with Applications to the Demand for Money.†Oxford Bulletin of Economics and Statistics 52 (1990): 169-210.
Jones, R.V., and K.J. Lomas. “Determinants of High Electrical Energy Demand in UK Homes: Socio-Economic and Dwelling Characteristics.†Energy and Buildings 101 (2015): 24-34
Jones, R.V., A. Fuertes, and K.J. Lomas. “The Socio-Economic, Dwelling and Appliance Related Factors Affecting Electricity Consumption in Domestic Buildings.†Renewable and Sustainable Energy Reviews 43 (2015): 901-17.
Kavousian, A., R. Rajagopal, and M. Fischer. “Determinants of Residential Electricity Consumption: Using Smart Meter Data to Examine the Effect of Climate, Building Characteristics, Appliance Stock, and Occupants’ Behavior.†Energy 55 (2013): 184-94.
Krigger, J., and C. Dorsi. Residential Energy: Cost Savings and Comfort for Existing Buildings. New Jersey, USA: Prentice Hall, 2009.
Lenzen, M., C. Dey, and B. Foran. “Energy Requirements of Sydney Households.†Ecological Economics 49 (2004): 375-99.
Leth-Petersen, S. Micro Evidence on Household Energy Consumption. AKF Memo, Danish Energy Agency, Denmark, 2001.
Liao, H.C., and T.F. Chang. “Space-Heating and Water-Heating Energy Demands of the Aged in the US.†Energy Economics 24 (2002): 267-84.
Lin, W., B. Chen, S. Luo, and L. Liang. “Factor Analysis of Residential Energy Consumption at the Provincial Level in China.†Sustainability 6 (2014): 7710-24.
Mohammadi, H. “Electricity Prices and Fuel Costs: Long-Run Relations and Short-Run Dynamics.†Energy Economics 3, no. 3 (2009): 503-9.
Narayan, S., and P. Narayan. “Determinants of Demand for Fijis Exports: An Empirical Investigation.†The Developing Economies 42, no. 1 (2004): 95-112.
Nesbakken, R. “Price Sensitivity of Residential Energy Consumption in Norway.†Energy Economics 21 (1999): 493-515.
Pessanha, J.F.M., and N. Leon. “Forecasting Long-Term Electricity Demand in the Residential Sector.†Procedia Computer Science 55 (2015): 529-38.
Pesaran, M.H., and Y. Shin. “An Autoregressive Distributed Lag Modelling Approach to Co-integration Analysis.†(1995) http://citeseerx.ist.psu.edu/viewdoc/download?
Pesaran, M.H., and Y. Shin, and R.J. Smith. “Bounds Testing Approaches to the Analysis of Level Relationships.†Journal of Applied Econometrics 16 (2001): 289-326.
Pesaran, M.H., and B. Pesaran. Working with Microfit 4.0: Interactive Econometric Analysis. Oxford: Oxford University Pres. 1997.
Pesaran, M.H., and R.P. Smith. “Structural Analysis of Co-integrating VARs.†Journal of Economic Surveys 12, no. 5 (1998): 471-505.Pachauri, S. “An Analysis of Cross-Sectional Variations in Total Household Energy Requirements in India Using Micro-Survey Data.†Energy Policy, 32 (2004): 1723-35.
Pimentel, D., J. Gardner, A. Bonnifield, X. Garcia, J. Grufferman, and C. Horan. “Energy Efficiency and Conservation for Individual Americans.†Environ Development Sustainability 11 (2006): 523-46.
Reiss, P.C., and M.W. White. “Household Electricity Demand, Revisits.†Review of Economic Studies 72 (2005): 853-83.
Silk, J.I., and F.L. Joutz. “Short- and Long-Run Elasticities in US Residential Electricity Demand: A Co-integration Approach.†Energy Economics 19 (1997): 493-513.
Sirichotpundit, P., C. Poboon, D. Bhanthumnavin, and W. Phoochinda. “Factors Affecting Energy Consumption of Households in Bangkok Metropolitan Area.†Environment and Natural Resources Journal 11, no. 1 (2013): 31-40.
Tserkezos, E.D. “Forecasting Residential Electricity Consumption in Greece Using Monthly and Quarterly Data.†Energy Economics 14, no. 3 (1992): 226-32.
Tso, G., and J. Guan. “Multilevel Regression Approach to Understand Effects of Environment Indicators and Household Features on Residential Energy Consumption.†Energy 66 (2014): 722-31.
Turkish State Meteorological Service. http://www.mgm.gov.tr/veridegerlendirme/il-ve-ilceler-istatistik.aspx#sfU (accessed April 9, 2016).
Xie, Q., H. Ouyang, and X. Gao “Estimation of Electricity Demand in the Residential Buildings of China Based on Household Survey Data.†International Journal of Hydrogen Energy 41, no.35 (2016): 15879-86.
Yaylali, M., and F. Lebe. “Electricity Demand of Residential Sector: Demand Estimation and Forecasting for Turkey.†Nevsehir Haci Bektas Veli University Journal of Social Sciences 3 (2013): 119-45.
Yoo, S.H. “Electricity Consumption and Economic Growth: Evidence from Korea.†Energy Policy 33 (2005): 1627-32.
Yoo, S.H., J.S. Lee, and J.S. Kwak. “Estimation of Residential Electricity Demand Function in Seoul by Correction for Sample Selection Bias.†Energy Policy 35 (2007): 5702-7.
Akbostanci, E., G.I. Tunc, and S. Turut-Asik. “Türkiye’nin Enerji Talebini Belirleyen Etkenler.†Paper presented at the 11th Turkey Energy Congress. İzmir, Turkey, 21-23 October 2009. http://www.dektmk.org.tr/pdf/enerji_ kongresi_11/57.pdf
Alberini, A., W. Gans, and D. Velez-Lopez. “Residential Consumption of Gas and Electricity in the US: The Role of Prices and Income.†Energy Econonomics 33 (2011): 870-81.
Athukorala, P.P.A.W., and C. Wilson. “Estimating Short and Long-Term Residential Demand for Electricity: New Evidence from Sri Lanka.†Energy Economics 32 (2010): 34-40.
Brown, R.L., J. Durbin, and J.M. Evans. “Techniques for Testing the Constancy of Regression Relations Overtime.†Journal of the Royal Statistical Society 37, no. 13 (1975): 149-63.
Ciarreta, A., and A. Zarraga. “Economic Growth–Electricity Consumption Causality in 12 European Countries: A Dynamic Panel Data Approach.†Energy Policy 38 (2010): 3790-96.
Dickey, D.A., and W.A. Fuller. “Distribution of the Estimators for Autoregressive Time Series with a Unit Root.†Journal of the American Statistical Society 74 (1979): 427-31.
Dickey, D.A., and W.A. Fuller. “Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root.†Econometrica 49, no. 4 (1981): 1057-72.
Dilaver, Z., and L.C. Hunt. “Modelling and Forecasting Turkish Residential Electricity Demand.†Energy Policy 39, no.6 (2011): 3117-27.
Dimitropoulos, J., L.C. Hunt, and G. Judge. “Estimating Underlying Energy Demand Trends Using UK Annual Data.†Applied Economics Letters 12 (2005): 239-44.
Eltony, M.N., and M.A. Al-Awadhi. “Residential Energy demand: a Case Study of Kuwait.†OPEC Review: Energy Economics and Related Issues 31, no. 3 (2007):159-68.
Energy Market Regulatory, Republic of Turkey. Doğal Gaz Piyasası 2014a Yılı Sektör Raporu. www.epdk.org.tr/TR/Dokuman/2500
Energy Market Regulatory, Republic of Turkey. Elektrik Piyasası 2014b Yılı Piyasa Gelişim Raporu. http://www.epdk.org.tr/TR/Dokumanlar/Elektrik/YayinlarRaporlar/ Elektrik Piyasasi Gelisim Raporu
Engle, R.F., and C.W.J. Granger. “Co-integration and Error Correction: Representation, Estimation and Testing.†Econometrica 55 (1987): 251-76.
Esmaeilimoakher, P., T. Urmee, T. Pryor and G. Baverstock. “Identifying the Determinants of Residential Electricity Consumption for Social Housing in Perth, Western Australia.†Energy and Buildings 133 (2016): 403-13.
Filippini, M. “Short- and Long-Run Time-of-Use Price Elasticities in Swiss Residential Electricity Demand.†Energy Policy 39 (2011): 5811-17.
Filippini, M., and S. Pachauri. “Elasticities of Electricity Demand in Urban Indian Households.†Energy Policy 32 (2004): 429-36.
Fisher, F.M., and C.A. Kaysen. A Study in Econometrics: The Demand for Electricity in United States, Amsterdam: North Holland Publishing Co, 1962.
Franco, G. and A.H. Sanstad. “Climate Change and Electricity Demand in California.†Climatic Change 87, no. 1 (2008): 139-51.
Guloglu, B. and E. Akin. “Determinants of the Household Electricity Demand in Turkey: Ordered Logit Approach.†Research Journal of Politics, Economics and Management 2, no. 3 (2014): 1-20.
Guta, F., A. Damte, and T. Ferede. “The Residential Demand for Electricity in Ethiopia, Environment for Development.†Environment for Development Discussion Paper April 2015. http://www.rff.org/files/sharepoint/WorkImages/Download/EfD-DP-15-07.pdf
Halicioglu, F. “Residential Electricity Demand Dynamics in Turkey.†Energy Economics 29 (2007): 199-210.
Halvorsen, B., and B.M. Larsen. “Norwegian Residential Electricity Demand-a Microeconomic Assessment of the Growth from 1976 to 1993.†Energy Policy 29 (2001): 227-36.
Hirst, E., and R. Goeltz. “Comparison of Actual Energy Saving with Audit Predictions for Homes in the North Central Region of the USA.†Building and Environment 20, no. 1 (1985): 1–6.
Holtedahl, P., and F.L. Joutz. “Residential Electricity Demand in Taiwan.†Energy Economics 26 (2004): 201-24.
International Energy Agency. Natural Gas Information 2016, Statistics, International Energy Agency, 2016.
Johansen, S. “Statistical Analysis of Cointegrating Vectors.†Journal of Economic Dynamics and Control 12, no. 2-3 (1988): 231-54.
Johansen, S., and K. Juselius. “Maximum Likelihood Estimation and Inference on Co-integration - with Applications to the Demand for Money.†Oxford Bulletin of Economics and Statistics 52 (1990): 169-210.
Jones, R.V., and K.J. Lomas. “Determinants of High Electrical Energy Demand in UK Homes: Socio-Economic and Dwelling Characteristics.†Energy and Buildings 101 (2015): 24-34
Jones, R.V., A. Fuertes, and K.J. Lomas. “The Socio-Economic, Dwelling and Appliance Related Factors Affecting Electricity Consumption in Domestic Buildings.†Renewable and Sustainable Energy Reviews 43 (2015): 901-17.
Kavousian, A., R. Rajagopal, and M. Fischer. “Determinants of Residential Electricity Consumption: Using Smart Meter Data to Examine the Effect of Climate, Building Characteristics, Appliance Stock, and Occupants’ Behavior.†Energy 55 (2013): 184-94.
Krigger, J., and C. Dorsi. Residential Energy: Cost Savings and Comfort for Existing Buildings. New Jersey, USA: Prentice Hall, 2009.
Lenzen, M., C. Dey, and B. Foran. “Energy Requirements of Sydney Households.†Ecological Economics 49 (2004): 375-99.
Leth-Petersen, S. Micro Evidence on Household Energy Consumption. AKF Memo, Danish Energy Agency, Denmark, 2001.
Liao, H.C., and T.F. Chang. “Space-Heating and Water-Heating Energy Demands of the Aged in the US.†Energy Economics 24 (2002): 267-84.
Lin, W., B. Chen, S. Luo, and L. Liang. “Factor Analysis of Residential Energy Consumption at the Provincial Level in China.†Sustainability 6 (2014): 7710-24.
Mohammadi, H. “Electricity Prices and Fuel Costs: Long-Run Relations and Short-Run Dynamics.†Energy Economics 3, no. 3 (2009): 503-9.
Narayan, S., and P. Narayan. “Determinants of Demand for Fijis Exports: An Empirical Investigation.†The Developing Economies 42, no. 1 (2004): 95-112.
Nesbakken, R. “Price Sensitivity of Residential Energy Consumption in Norway.†Energy Economics 21 (1999): 493-515.
Pessanha, J.F.M., and N. Leon. “Forecasting Long-Term Electricity Demand in the Residential Sector.†Procedia Computer Science 55 (2015): 529-38.
Pesaran, M.H., and Y. Shin. “An Autoregressive Distributed Lag Modelling Approach to Co-integration Analysis.†(1995) http://citeseerx.ist.psu.edu/viewdoc/download?
Pesaran, M.H., and Y. Shin, and R.J. Smith. “Bounds Testing Approaches to the Analysis of Level Relationships.†Journal of Applied Econometrics 16 (2001): 289-326.
Pesaran, M.H., and B. Pesaran. Working with Microfit 4.0: Interactive Econometric Analysis. Oxford: Oxford University Pres. 1997.
Pesaran, M.H., and R.P. Smith. “Structural Analysis of Co-integrating VARs.†Journal of Economic Surveys 12, no. 5 (1998): 471-505.Pachauri, S. “An Analysis of Cross-Sectional Variations in Total Household Energy Requirements in India Using Micro-Survey Data.†Energy Policy, 32 (2004): 1723-35.
Pimentel, D., J. Gardner, A. Bonnifield, X. Garcia, J. Grufferman, and C. Horan. “Energy Efficiency and Conservation for Individual Americans.†Environ Development Sustainability 11 (2006): 523-46.
Reiss, P.C., and M.W. White. “Household Electricity Demand, Revisits.†Review of Economic Studies 72 (2005): 853-83.
Silk, J.I., and F.L. Joutz. “Short- and Long-Run Elasticities in US Residential Electricity Demand: A Co-integration Approach.†Energy Economics 19 (1997): 493-513.
Sirichotpundit, P., C. Poboon, D. Bhanthumnavin, and W. Phoochinda. “Factors Affecting Energy Consumption of Households in Bangkok Metropolitan Area.†Environment and Natural Resources Journal 11, no. 1 (2013): 31-40.
Tserkezos, E.D. “Forecasting Residential Electricity Consumption in Greece Using Monthly and Quarterly Data.†Energy Economics 14, no. 3 (1992): 226-32.
Tso, G., and J. Guan. “Multilevel Regression Approach to Understand Effects of Environment Indicators and Household Features on Residential Energy Consumption.†Energy 66 (2014): 722-31.
Turkish State Meteorological Service. http://www.mgm.gov.tr/veridegerlendirme/il-ve-ilceler-istatistik.aspx#sfU (accessed April 9, 2016).
Xie, Q., H. Ouyang, and X. Gao “Estimation of Electricity Demand in the Residential Buildings of China Based on Household Survey Data.†International Journal of Hydrogen Energy 41, no.35 (2016): 15879-86.
Yaylali, M., and F. Lebe. “Electricity Demand of Residential Sector: Demand Estimation and Forecasting for Turkey.†Nevsehir Haci Bektas Veli University Journal of Social Sciences 3 (2013): 119-45.
Yoo, S.H. “Electricity Consumption and Economic Growth: Evidence from Korea.†Energy Policy 33 (2005): 1627-32.
Yoo, S.H., J.S. Lee, and J.S. Kwak. “Estimation of Residential Electricity Demand Function in Seoul by Correction for Sample Selection Bias.†Energy Policy 35 (2007): 5702-7.
Downloads
Published
2017-11-29
How to Cite
Tatlı, H. (2017). Short- and Long-Term Determinants of Residential Electricity Demand in Turkey. International Journal of Economics, Management and Accounting, 25(3), 443–464. https://doi.org/10.31436/ijema.v25i3.448
Issue
Section
Articles
