Assessing the Elasticities of Electricity Consumption for Rural and Urban Areas in Malaysia: A Non-linear Approach

Abstract

This paper investigates and estimates the price and income elasticity of electricity consumption and then compares the level of sensitivity of demand for electricity in the rural and urban areas in Malaysia. The non linear model was employed to estimate the elasticity of electricity consumption. The electricity demand has been estimated as a function of tariff, real GDP, gas price and population in the rural and urban population. The gas price has been used as a proxy to measure the level of sensitivity goods by using the annual data covering the 1980-2009 period. The results showed that the income elasticity ( was less than unity which indicated electricity as a necessity good to the people in Malaysia. The reaction of electricity consumption was found to be greater in the urban area compared to the rural area. The higher sensitivity of electricity consumption in the urban population was due to higher exposure to electricity appliances and facilities.

Is Financial Development in Malaysia Green? An Empirical Assessment of EKC Hypothesis

“…It shows that all variables are substantially stationary [I (1)] at 1% except for LD. The stationarity results are consistent with most of previous studies that employed financial and macroeconomics variables that claimed these variables are nonstationary at level, but they would become stationary after the first or second difference (Bekhet & Mugableh, 2012;Bekhet & Othman, 2011). //doi.org/10.15405/epsbs.2020.12.05.55 Corresponding Author: Nor Salwati Othman Selection and peer-review under…”

Long-Run Elasticities of Electricity Consumption, FDI, Export and GDP in Malaysia

“…8; The second strand deals with the relationship between energy, FDI and GDP. Bekhet and Othman (2010) Based on the previous findings, this study hypothesized that there is a long run relationship between export, FDI and electricity consumption in Malaysia. In particular, the positive relationship will exist between EC and innovative economic activities if the scale effect exceed the technical effect.…”

“…All variables are expressed in logarithmic form in order to obtain more stationary behavior (Bekhet & Othman, 2010), and reduce the possibility of heteroscadasticity and autocorrelation to be exist. The detail and sources of variables used in this study are shown in table 2.…”

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