Are fluctuations in electricity consumption per capita transitory? Evidence from developed and developing economies

Abstract

This paper investigates the unit root properties of electricity consumption per capita of 67 developed and developing countries for the period 1971-2010. To examine the stationary properties of electricity consumption per capita, we have adopted Lee and Strazicich (2003,2004) test of unit root that allows us to test for at most two endogenous breaks and uses the Lagrange Multiplier (LM) test statistics. Results show that 65 country series reject the unit root null hypothesis except for 2 country series. Thus, our empirical findings provide significant evidence that electricity consumption per capita is stationary in almost all countries considered. The stationarity of electricity consumption per capita indicates that it should be possible for the series to forecast future movements in the energy consumption based on the past behaviors of the series.