Empirical Insights into the Long-Run Linkage between Households Energy Consumption and Economic Growth: Macro-Level Empirical Evidence from Pakistan

Abstract

This study is a maiden empirical attempt to examine the long-run linkage between households’ usage of energy and economic progression in Pakistan from the period of 1972–2017. The Autoregressive Distributive Lag (ARDL) bounds testing method to co-integrate is employed to expose the causality dynamics between the variables such as households’ electricity consumption, households’ gas consumption, population growth, and per capita Gross Domestic Product (GDP) in Pakistan. The study adopted three renowned unit root approaches through the use of the Augmented Dickey-Fuller (ADF), the Phillips-Perron (P-P), and Zivot-Andrews (Z&A) tests to check the stationarity of the variables, while the Johansen cointegration technique is also employed to assess the robustness of the long-run association. The validity of outcomes is also checked with casualty and variance decomposition. The estimated results reveal that, in both the short and long run, households’ electricity and gas usage positively affect economic growth, while population growth in the long-run has a negative impact, but the short-run analysis has a positive impact on economic growth in Pakistan. Additionally, the Granger causality and variance decomposition confirm the robustness of outcomes and suggesting a long run association among the variables, and a unidirectional causal link running from three variables to economic growth of Pakistan in the short run.

An extension of the theory of planned behavior to understand factors influencing Pakistani households’ energy-saving intentions and behavior: a mediated–moderated model

“…The dependence on domestic energy sources, coupled with insufficient domestic energy production, the financial fragility of power companies, power production capacity, and the low utilization of coal and hydrological resources, has led to severe energy shortages (Rehman et al, 2021). Approximately, 64%, 30%, and 6% of energy are generated through thermal system, hydroelectric system, and nuclear power, respectively (Chandio et al, 2019). Although Pakistan is the sixth most populous country in the world, one of the fastest-urbanizing South Asian nations, and a rapidly emerging economy, 25% and 50% of the population lack access to electricity and clean cooking facilities, respectively (Biresselioglu et al, 2019).…”

Incorporating Environmental Pollution and Human Development in the Energy-Growth Nexus: A Novel Long Run Investigation for Pakistan

“…Non-renewable energy contributes 64% to the overall energy mix of Pakistan [ 8 ]. The coal, oil, and gas reserves in Pakistan can produce energy for decades, and utilization of these traditional resources may lower production costs and boost economic conditions by reducing dependence on imported coal [ 9 , 10 ], but at the same time, it increases concern for environmental sustainability [ 11 ].…”

Assessing the asymmetric war-growth nexus: A case of Afghanistan

“…Since armed conflicts force governments to reallocate budgets, capital investment is assumed to swiftly react to the reallocation during wartime and thus affect the overall economic performance in a conflict environment. Both economic theories and empirical studies show that there exists a direct link between household consumption expenditures and economic growth [ 49 ] and it is used to control its effects on economic growth. Moreover, studies by Dogan and Turkekul [ 50 ], Magazzino [ 51 ], and Ma and Fu [ 52 ] suggest employing the energy consumption when testing the effects of other predictors on economic growth to avoid any potential specification bias.…”