Determinants of Electricity consumption in Egypt

What is it about?

The study examined the determinants of electricity consumption for the Egyptian economy over the period of 1971–2012. An Engle-Granger and the Phillips-Ouliaris tests revealed that a long-run relationship exists between electricity consumption, price, income, urbanisation, financial development, carbon emission, trade and education. Estimation from the Fully Modified OLS and Canonical Cointegrating Regression models showed that income, urbanisation, financial development, trade and education positively affect electricity consumption. Also, while industrialisation had negative effect, price and carbon emissions were found not to have any significant effect on electricity consumption in Egypt.

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Why is it important?

Despite the plethora of empirical studies on electricity consumption, there is a lack of ample empirical studies that offer econometrics analysis on the drivers of electricity consumption in Egypt. Further, we include in our analysis the role of trade and education in the level of electricity consumption and recorded a significant effect from the two on electricity consumption.