Are fluctuations in energy consumption per capita transitory? Evidence from Turkey

Abstract

The aim of this study is to test the unit root null hypothesis for energy consumption variables in Turkey. We consider the integrational properties of energy consumption for seven sectors during 1970-2006 period. When we apply the LM univariate test without break, we find a unit root in energy consumption for industrial, transportation, agriculture, non-energy field, final energy consumption and circuit and energy sectors. Thus, shocks to energy consumption have a permanent effect on these sectors. However, when we apply one break LM unit root test for each sector we find that all disaggregate energy sectors are stationary, which means that shocks to energy consumption have transitory effects. Generally, except for residential energy consumption, we find strong support that shocks to energy consumption have a permanent effect on energy consumption in Turkey. However, by allowing break, the null hypothesis of a unit root is also rejected for other energy consumption cases where shocks are transitory in nature.