ISSN: 2222-6990
Open access
This study is based on the estimation of residential demand of electricity for Pakistan with major focus on the income elasticities and the luxury appliances impact over the demand. The monthly electricity unit consumption is used as dependent variable that is constructed through backward induction method from monthly electricity expenditure that help to find clear dimensions of the demand. For estimation of demand Two Stage Least Square method of estimation has used with the five explanatory variables; household monthly income, household size, dwelling size, appliances and luxury appliances. The empirical analysis is conducted by using Two Stage Least Square methods. The empirical findings represent the positive significant income elasticities that are almost the same across the different income groups in various regions. The household demand for electricity has strong response to the luxury appliances. The household size revealed negative significant response to the residential demand for electricity. The dwelling size and appliances have shown positive significant or insignificant impact over the residential electricity demand.
Adelekan, I. O., & Jerome, A. T. (2006). Dynamics of household energy consumption in a traditional African city, Ibadan. Environmentalist, 26(2), 99-110.
Alberini, A., Gans, W., & Velez-Lopez, D. (2011). Residential consumption of gas and electricity in the US: The role of prices and income. Energy Economics, 33(5), 870-881.
Alter, N., & Syed, S. H. (2011). An empirical analysis of electricity demand in Pakistan. International Journal of Energy Economics and Policy, 1(4), 116-139.
Arbues, F., Garc?a-Valinas, M. Á., & Mart?nez-Espiñeira, R. (2003). Estimation of residential water demand: a state-of-the-art review. The Journal of Socio-Economics, 32(1), 81-102.
Burney, N. A., & Akhtar, N. (1990). Fuel demand elasticities in Pakistan: an analysis of households' expenditure on fuels using micro data. The Pakistan Development Review, 155-174.
Clarkson, G. P. (1962). The theory of consumer demand: a critical appraisal.
D’hulst, R., Labeeuw, W., Beusen, B., Claessens, S., Deconinck, G., & Vanthournout, K. (2015). Demand response flexibility and flexibility potential of residential smart appliances: Experiences from large pilot test in Belgium. Applied Energy, 155, 79-90. doi: http://dx.doi.org/10.1016/j.apenergy.2015.05.101
Darwish, S., Abdo, H., & AlShuwaiee, W. M. (2018). Opportunities, challenges and risks of transition into renewable energy: the case of the Arab Gulf Cooperation Council. International Energy Journal, 18(4).
Deaton, A. (1980). Economics and consumer behavior: Cambridge university press.
Eiswerth, M. E., Abendroth, K. W., Ciliano, R. E., Ouerghi, A., & Ozog, M. T. (1998). Residential electricity use and the potential impacts of energy efficiency options in Pakistan. Energy policy, 26(4), 307-315. doi: http://dx.doi.org/10.1016/S0301-4215(97)00163-8
EMC. (2016). The Outlook for Energy: A View to 2040: Exxon Mobil Corporation, Texas, United States.
Eryilmaz, D., & Sergici, S. (2016). Integration of residential PV and its implications for current and future residential electricity demand in the United States. The Electricity Journal, 29(1), 41-52. doi: http://dx.doi.org/10.1016/j.tej.2016.02.004
Eskeland, G. A., & Mideksa, T. K. (2009). Climate change and residential electricity demand in Europe. Available at SSRN 1338835.
Fell, H., Li, S., & Paul, A. (2014). A new look at residential electricity demand using household expenditure data. International Journal of Industrial Organization, 33, 37-47.
Filippini, M., & Pachauri, S. (2004). Elasticities of electricity demand in urban Indian households. Energy policy, 32(3), 429-436.
Hung, M.-F., & Huang, T.-H. (2015). Dynamic demand for residential electricity in Taiwan under seasonality and increasing-block pricing. Energy Economics, 48, 168-177. doi: http://dx.doi.org/10.1016/j.eneco.2015.01.010
Ito, K. (2012). Do consumers respond to marginal or average price? Evidence from nonlinear electricity pricing: National Bureau of Economic Research.
Jacobsen, G. D., Kotchen, M. J., & Vandenbergh, M. P. (2012). The behavioral response to voluntary provision of an environmental public good: Evidence from residential electricity demand. European Economic Review, 56(5), 946-960.
Jamil, F., & Ahmad, E. (2010). The relationship between electricity consumption, electricity prices and GDP in Pakistan. Energy policy, 38(10), 6016-6025. doi: http://dx.doi.org/10.1016/j.enpol.2010.05.057
Jamil, F., & Ahmad, E. (2011). Income and price elasticities of electricity demand: Aggregate and sector-wise analyses. Energy policy, 39(9), 5519-5527. doi: http://dx.doi.org/10.1016/j.enpol.2011.05.010
Javid, M., & Qayyum, A. (2014). Electricity consumption-GDP nexus in Pakistan: A structural time series analysis. Energy, 64, 811-817.
Jebran, K. (2013). Causal Relationship between Electricity Consumption and GDP in Pakistan. Stud, 2(4).
Khan, M. A., & Ahmad, U. (2008). Energy demand in Pakistan: a disaggregate analysis. The Pakistan Development Review, 437-455.
Naeem Ur Rehman, K., Tariq, M., & Khan, J. (2010). Determinants of household’s demand for electricity in district Peshawar.
Nawaz, S., Iqbal, N., & Anwar, S. (2013). Electricity Demand in Pakistan: A Nonlinear Estimation. The Pakistan Development Review, 52(4), 479-492.
Nawaz, S., Iqbal, N., & Anwar, S. (2014). Modelling electricity demand using the STAR (Smooth Transition Auto-Regressive) model in Pakistan. Energy, 78, 535-542. doi: http://dx.doi.org/10.1016/j.energy.2014.10.040
Paul, A., Myers, E., & Palmer, K. (2009). A partial adjustment model of US electricity demand by region, season, and sector. Resource for the Future Discussion Paper, 08-50.
Pourazarm, E., & Cooray, A. (2013). Estimating and forecasting residential electricity demand in Iran. Economic Modelling, 35, 546-558. doi: http://dx.doi.org/10.1016/j.econmod.2013.08.006
Rashid, T., & Sahir, M. H. (2015). Modeling and Analysis of Long Term Energy Demands in Residential Sector of Pakistan. Technical Journal, 20(3), 11.
Reiss, P. C., & White, M. W. (2005). Household electricity demand, revisited. The Review of Economic Studies, 72(3), 853-883.
Shahbaz, M., & Feridun, M. (2012). Electricity consumption and economic growth empirical evidence from Pakistan. Quality & Quantity, 46(5), 1583-1599.
Shi, G., Zheng, X., & Song, F. (2012). Estimating elasticity for residential electricity demand in china. The Scientific World Journal, 2012.
Son, H., & Kim, C. (2016). Short-term forecasting of electricity demand for the residential sector using weather and social variables. Resources, Conservation and Recycling. doi: http://dx.doi.org/10.1016/j.resconrec.2016.01.016
Yamagata, Y., Murakami, D., & Seya, H. (2015). A comparison of grid-level residential electricity demand scenarios in Japan for 2050. Applied Energy, 158, 255-262. doi: http://dx.doi.org/10.1016/j.apenergy.2015.08.079
Zaman, K., Khan, M. M., Ahmad, M., & Rustam, R. (2012). Determinants of electricity consumption function in Pakistan: Old wine in a new bottle. Energy policy, 50, 623-634. doi: http://dx.doi.org/10.1016/j.enpol.2012.08.003
Zhou, S., & Teng, F. (2013). Estimation of urban residential electricity demand in China using household survey data. Energy policy, 61, 394-402.
In-Text Citation: (Akhtar et al., 2020)
To Cite this Article: Akhtar, M. H., Iqbal, N., Tariq, B., & Ab-Rahim, R. (2020). Determinants of Residential Electricity Demand: Empirical Evidence from Pakistan. International Journal of Academic Research in Business and Social Sciences, 10(12), 162–177.
Copyright: © 2020 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode