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Abstract
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Article Information:
The Dynamics of Electricity Demand and Comsumption in Nigeria: Application of the Bounds Testing Approach
Udo N. Ekpo, Chuku A. Chuku and Ekpeno L. Effiong
Corresponding Author: Chuku Chuku
Submitted: 2011 February, 08
Accepted: 2011 March, 15
Published: 2011 August, 15 |
Abstract:
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Clear insights about the dynamic nature of electricity demand and consumption is essential for
capacity additions, investments and effective optimal energy policies. This paper provides background analysis
of electricity demand and consumption trends in Nigeria, with the key determinants of electricity demand and
the investment requirements clearly highlighted. Further, the paper utilizes the bounds testing approach to
empirically investigate the dynamics of electricity demand and consumption in Nigeria between 1970 and 2008.
The results show that real GDP per capita, population and industrial output significantly drives electricity
consumption in the long-run and short-run while electricity price is not a significant determinant. In the shortrun,
industrial output has a crowding out effect on the demand for electricity. The results are robust because
the parameter estimates are stable over the estimation period. These results imply that income per capita is the
major determinant of electricity demand, and therefore, deregulated pricing of electricity products, will ensure
efficient product and resource allocation in Nigeria to reflect the observed income inelasticity for electricity
products JEL Classification: C22; C32; Q41; Q42; Q43.
Key words: Bounds testing, cointegration, electricity consumption, Nigeria, , ,
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Cite this Reference:
Udo N. Ekpo, Chuku A. Chuku and Ekpeno L. Effiong, . The Dynamics of Electricity Demand and Comsumption in Nigeria: Application of the Bounds Testing Approach. Current Research Journal of Economic Theory, (2): 43-52.
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ISSN (Online): 2042-485X
ISSN (Print): 2042-4841 |
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