Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia

Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia

Electricity is one of the important sources of energy and is vital for the process of the country’s economic growth. The issues of growing electricity consumption and heavy electricity subsidies have raised the attention of the government. However, the majority of the previous studies that speciali...

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Main Author: Mohd Hafiz Aswad, Nadzri
Format: Thesis
Language:eng
eng
Published: 2015
Subjects:
HC Economic History and Conditions
Online Access:https://etd.uum.edu.my/5138/1/s815104.pdf
https://etd.uum.edu.my/5138/2/s815104_abstract.pdf
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institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Hasan Basri, Bakti
Hassan, Sallahuddin
topic HC Economic History and Conditions
spellingShingle HC Economic History and Conditions
Mohd Hafiz Aswad, Nadzri
Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia
description Electricity is one of the important sources of energy and is vital for the process of the country’s economic growth. The issues of growing electricity consumption and heavy electricity subsidies have raised the attention of the government. However, the majority of the previous studies that specialize on the demand side of electricity were focused on total electricity consumption. Thus, this paper aims to provide the background analysis of electricity consumption trends with the focus on the four main economic sectors in Malaysia such as the industrial, commercial, mining and agricultural. The purposes were to examine the relationship between electricity consumption, Gross Domestic Product (GDP) and price of electricity based on panel data for the period 2002 to 2012. The sectoral electricity consumption model was tested using econometric techniques such as Panel Cointegration, Panel Fully Modified Ordinary Least Square (FMOLS) and Panel Granger Causality tests. The Panel Cointegration Test confirmed an existence of a stable long run relationship among the variables. The results from the panel FMOLS estimation revealed that the electricity consumption in industrial, commercial and mining sectors was positively responsive to GDP changes. In the agricultural sector, GDP had a negative effect on electricity consumption. Moreover, the higher electricity price tended to increase and decrease electricity consumption in the industrial sector and commercial sector respectively. Nonetheless, the results of the electricity price were not significant in the mining and agricultural sectors. For all the sectors, an increase in GDP had a positive effect on electricity consumption. Finally, the Panel Granger Causality Test detected a relationship running from economic growth to electricity consumption. The results obtained indicated that policy maker must be careful in the formulation of energy policy, thus suggesting that the policy should be focused on the electricity consumption in each sector
format Thesis
qualification_name masters
qualification_level Master's degree
author Mohd Hafiz Aswad, Nadzri
author_facet Mohd Hafiz Aswad, Nadzri
author_sort Mohd Hafiz Aswad, Nadzri
title Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia
title_short Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia
title_full Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia
title_fullStr Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia
title_full_unstemmed Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia
title_sort analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in malaysia
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2015
url https://etd.uum.edu.my/5138/1/s815104.pdf
https://etd.uum.edu.my/5138/2/s815104_abstract.pdf
_version_ 1747827869138026496
spelling my-uum-etd.51382021-04-04T07:48:29Z Analysis on the relationship between sectoral electricity consumption, economics performance and electricity price in Malaysia 2015 Mohd Hafiz Aswad, Nadzri Hasan Basri, Bakti Hassan, Sallahuddin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HC Economic History and Conditions Electricity is one of the important sources of energy and is vital for the process of the country’s economic growth. The issues of growing electricity consumption and heavy electricity subsidies have raised the attention of the government. However, the majority of the previous studies that specialize on the demand side of electricity were focused on total electricity consumption. Thus, this paper aims to provide the background analysis of electricity consumption trends with the focus on the four main economic sectors in Malaysia such as the industrial, commercial, mining and agricultural. The purposes were to examine the relationship between electricity consumption, Gross Domestic Product (GDP) and price of electricity based on panel data for the period 2002 to 2012. The sectoral electricity consumption model was tested using econometric techniques such as Panel Cointegration, Panel Fully Modified Ordinary Least Square (FMOLS) and Panel Granger Causality tests. The Panel Cointegration Test confirmed an existence of a stable long run relationship among the variables. The results from the panel FMOLS estimation revealed that the electricity consumption in industrial, commercial and mining sectors was positively responsive to GDP changes. In the agricultural sector, GDP had a negative effect on electricity consumption. Moreover, the higher electricity price tended to increase and decrease electricity consumption in the industrial sector and commercial sector respectively. Nonetheless, the results of the electricity price were not significant in the mining and agricultural sectors. For all the sectors, an increase in GDP had a positive effect on electricity consumption. Finally, the Panel Granger Causality Test detected a relationship running from economic growth to electricity consumption. The results obtained indicated that policy maker must be careful in the formulation of energy policy, thus suggesting that the policy should be focused on the electricity consumption in each sector 2015 Thesis https://etd.uum.edu.my/5138/ https://etd.uum.edu.my/5138/1/s815104.pdf text eng public https://etd.uum.edu.my/5138/2/s815104_abstract.pdf text eng public masters masters Universiti Utara Malaysia Abbas, F. & Choudhury, N. (2013). Electricity consumption-economic growth Nexus: An aggregated and disaggregated causality analysis in India and Pakistan. Journal of Policy Modeling, 35, 538-553. Abdullah, H., Bakar, N.A. & Hassan, S. (2014). 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