Modelling the causal linkages among residential electricity consumption, gross domestic product, price of electricity, price of electric appliances, population and foreign direct investment in Malaysia

Lee Lian Ivy-Yap, Hussain A. Bekhet

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

Residential electricity consumption in Malaysia is increasing rapidly and effective measures are urgently needed to contain its rapid growth to achieve better energy security. The current paper attempts to investigate the multivariate Granger causalities and dynamic responses of residential electricity consumption in Malaysia for the 1978-2013 period. In the long run, all the determinants of residential electricity consumption (real disposable income, price of electricity, price of electric appliances, population and foreign direct investment) Granger cause it but in the short run, only the price of electric appliances and population do so. The response of residential electricity consumption to shocks alternates between positive and negative but diminishes with time. In addition to own shocks, shocks to the price of electricity contribute most of the variance in residential electricity consumption. The study shows that pricing policies are effective in reducing residential electricity consumption. As fossil fuels are finite, careful planning of energy consumption is necessary to safeguard energy security.

Original languageEnglish
Pages (from-to)41-59
Number of pages19
JournalInternational Journal of Energy Technology and Policy
Volume12
Issue number1
DOIs
Publication statusPublished - 01 Jan 2016

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Electric appliances
electricity consumption
foreign direct investment
gross domestic product
direct investment
Gross Domestic Product
foreign investment
electricity
Malaysia
Electricity
modeling
Energy security
energy
disposable income
pricing policy
dynamic response
causality
energy consumption
fossil fuel
price

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Fuel Technology
  • Energy Engineering and Power Technology

Cite this

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