Relationship between Electric-Power Sector Development and Socioeconomic Parameters: Statistical Analysis Approach
Publication: Journal of Energy Engineering
Volume 146, Issue 5
Abstract
Electric power is a critical commodity of the modern world where demand for electricity has been increasing significantly in the last decades, and it is expected to keep increasing in the future. Several socioeconomic factors affect and get affected by the electric sector development, but the literature falls short in studying such relationships in a holistic approach. The goal of this paper is to study how the electric power sector development (i.e., electrical power consumption per capita and electrical losses during distribution) is associated with the socioeconomic indicators of economic growth, human development, and corruption. The research methodology comprises a series of statistical tests, such as the correlation analysis, linear regression, panel analysis, polynomial regression, and Granger causality testing. The findings show that there is generally a relationship between electrical power consumption on one side as well as economic growth, human development, and corruption on the other side. This relationship emerges when studying all the data from all countries as a whole but not necessarily for each country separately. In general, countries that have healthier economies, more advanced human development, and low corruption tend to have higher electrical consumption per capita. Regarding the causality between the parameters, results show that there is no causality effect on the short term between electrical power consumption and any of the socioeconomic indicators under investigation. Also, it was found that there is generally a positive relationship between low corruption and low electrical power losses. In countries with higher corruption, there are large amounts of electric power that is lost (i.e., the power is generated but is not billed). However, overall, an analysis of the relationship between corruption and electric power losses are mixed and hard to interpret. Ultimately, this research emphasizes that the dynamics of the electrical power sector should be examined from the economic and social perspectives and not only the engineering technical perspective.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
All data generated or analyzed during the study are included in the published article.
References
Abdelnour, Z. K. 2003. “The corruption behind Lebanon’s electricity crisis.” Accessed September 7, 2019. https://www.meforum.org/meib/articles/0308_l1.htm.
Alam, M. S., E. Kabir, M. M. Rahman, and M. A. K. Chowdhury. 2004. “Power sector reform in Bangladesh: Electricity distribution system.” Energy 29 (11): 1773–1783. https://doi.org/10.1016/j.energy.2004.03.005.
Altinay, G., and E. Karagol. 2005. “Electricity consumption and economic growth: Evidence from Turkey.” Energy Econ. 27 (6): 849–856. https://doi.org/10.1016/j.eneco.2005.07.002.
ASKJA Energy. 2019. “Energy data.” In Askja energy—The essential perspective on energy in the Northern Atlantic and Arctic region. Reykjavik, Iceland: Askja Energy Partners.
Chan, A. P. C., D. C. K. Ho, and C. M. Tam. 2001. “Design and build project success factors: Multivariate analysis.” J. Constr. Eng. Manage. 127 (2): 93–100. https://doi.org/10.1061/(ASCE)0733-9364(2001)127:2(93).
Chen, S.-T., H.-I. Kuo, and C.-C. Chen. 2007. “The relationship between GDP and electricity consumption in 10 Asian countries.” Energy Policy 35 (4): 2611–2621. https://doi.org/10.1016/j.enpol.2006.10.001.
Despotis, D. K. 2005. “A reassessment of the human development index via data envelopment analysis.” J. Oper. Res. Soc. 56 (8): 969–980. https://doi.org/10.1057/palgrave.jors.2601927.
Ghosh, S. 2002. “Electricity consumption and economic growth in India.” Energy Policy 30 (2): 125–129. https://doi.org/10.1016/S0301-4215(01)00078-7.
Granger, C. W. J. 1969. “Investigating causal relations by econometric models and cross-spectral methods.” Econometrica 37 (3): 424–438. https://doi.org/10.2307/1912791.
Green, R. K. 1997. “Follow the leader: How changes in residential and non-residential investment predict changes in GDP.” Real Estate Economics 25 (2): 253–270. https://doi.org/10.1111/1540-6229.00714.
Greene, W. H. 2018. Econometric analysis. New York: Pearson.
Hassanipour-Azgomi, S., A. Mohammadian-Hafshejani, M. Ghoncheh, F. Towhidi, S. Jamehshorani, and H. Salehiniya. 2016. “Incidence and mortality of prostate cancer and their relationship with the Human Development Index worldwide.” Prostate Int. 4 (3): 118–124. https://doi.org/10.1016/j.prnil.2016.07.001.
Herrero, C., R. Martínez, and A. Villar. 2019. “Population structure and the Human Development Index.” Social Indic. Res. 141 (2): 731–763. https://doi.org/10.1007/s11205-018-1852-0.
Hiemstra, C., and J. D. Jones. 1994. “Testing for linear and nonlinear granger causality in the stock price-volume relation.” J. Finance 49 (5): 1639–1664. https://doi.org/10.2307/2329266.
Hunter, J. D. 2007. “Matplotlib: A 2D graphics environment.” Comput. Sci. Eng. 9 (3): 90. https://doi.org/10.1109/MCSE.2007.55.
IEA (International Energy Agency). 2020. Data and statistics. Paris: IEA.
Kaufmann, D., A. Kraay, and M. Mastruzzi. 2011. “The worldwide governance indicators: Methodology and analytical issues.” Hague J. Rule Law 3 (2): 220–246. https://doi.org/10.1017/S1876404511200046.
Lee, C., J. Won, and E.-B. Lee. 2019. “Method for predicting raw material prices for product production over long periods.” J. Constr. Eng. Manage. 145 (1): 05018017. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001586.
Lütkepohl, H., M. Krätzig, and P. C. Phillips. 2004. Applied time series econometrics. Cambridge, UK: Cambridge University Press.
Mazur, A. 2011. “Does increasing energy or electricity consumption improve quality of life in industrial nations?” Energy Policy 39 (5): 2568–2572. https://doi.org/10.1016/j.enpol.2011.02.024.
McKinney, W. 2010. “Data structures for statistical computing in Python.” In Proc., 9th Python in Science Conf., 51–56. Austin, TX: Enthought.
Millman, K. J., and M. Aivazis. 2011. “Python for scientists and engineers.” Comput. Sci. Eng. 13 (2): 9–12. https://doi.org/10.1109/MCSE.2011.36.
Min, B., and M. Golden. 2014. “Electoral cycles in electricity losses in India.” Energy Policy 65 (Feb): 619–625. https://doi.org/10.1016/j.enpol.2013.09.060.
Mozumder, P., and A. Marathe. 2007. “Causality relationship between electricity consumption and GDP in Bangladesh.” Energy Policy 35 (1): 395–402. https://doi.org/10.1016/j.enpol.2005.11.033.
Niu, S., Y. Jia, W. Wang, R. He, L. Hu, and Y. Liu. 2013. “Electricity consumption and human development level: A comparative analysis based on panel data for 50 countries.” Int. J. Electr. Power Energy Syst. 53 (Dec): 338–347. https://doi.org/10.1016/j.ijepes.2013.05.024.
Noorbakhsh, F. 1998. “The Human Development Index: Some technical issues and alternative indices.” J. Int. Dev. 10 (5): 589–605. https://doi.org/10.1002/(SICI)1099-1328(199807/08)10:5%3C589::AID-JID484%3E3.0.CO;2-S.
Oliphant, T. E. 2006. A guide to NumPy. Spanish Fork, UT: Trelgol Publishing.
Oliphant, T. E. 2007. “Python for scientific computing.” Comput. Sci. Eng. 9 (3): 10–20. https://doi.org/10.1109/MCSE.2007.58.
Olukoju, A. 2004. “‘Never expect power always’: Electricity consumers’ response to monopoly, corruption and inefficient services in Nigeria.” Afr. Affairs 103 (410): 51–71. https://doi.org/10.1093/afraf/adh004.
Ouedraogo, N. S. 2013. “Energy consumption and human development: Evidence from a panel cointegration and error correction model.” Energy 63 (Dec): 28–41. https://doi.org/10.1016/j.energy.2013.09.067.
Ozturk, I., and A. Acaravci. 2010. “The causal relationship between energy consumption and GDP in Albania, Bulgaria, Hungary and Romania: Evidence from ARDL bound testing approach.” Appl. Energy 87 (6): 1938–1943. https://doi.org/10.1016/j.apenergy.2009.10.010.
Ray, S., B. Ghosh, S. Bardhan, and B. Bhattacharyya. 2016. “Studies on the impact of energy quality on Human Development Index.” Renewable Energy 92 (Jul): 117–126. https://doi.org/10.1016/j.renene.2016.01.061.
Sagar, A. D., and A. Najam. 1998. “The Human Development Index: A critical review.” Ecol. Econ. 25 (3): 249–264. https://doi.org/10.1016/S0921-8009(97)00168-7.
Schlesinger, R. 2017. Physical activity and the Human Development Index. Muncie, IN: Ball State Univ.
Seabold, S., and J. Perktold. 2010. “Statsmodels: Econometric and statistical modeling with python.” In Proc., 9th Python in Science Conf., Scipy, 61. Austin, TX: Enthought.
Shahandashti, S. M., and B. Ashuri. 2013. “Forecasting engineering news-record construction cost index using multivariate time series models.” J. Constr. Eng. Manage. 139 (9): 1237–1243. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000689.
Sheppard, K. 2017. “Linear model estimation—Linearmodels 4.5 documentation.” Accessed January 30, 2020. https://bashtage.github.io/linearmodels/doc/index.html#.
Shiu, A., and P.-L. Lam. 2004. “Electricity consumption and economic growth in China.” Energy Policy 32 (1): 47–54. https://doi.org/10.1016/S0301-4215(02)00250-1.
Smith, T. B. 2004. “Electricity theft: A comparative analysis.” Energy Policy 32 (18): 2067–2076. https://doi.org/10.1016/S0301-4215(03)00182-4.
Spangenberg, J. H. 2016. “The corporate Human Development Index CHDI: A tool for corporate social sustainability management and reporting.” J. Cleaner Prod. 134 (Part A): 414–424. https://doi.org/10.1016/j.jclepro.2015.12.043.
Transparency International. 2018. “Corruption Perceptions Index 2018.” Accessed September 10, 2019. www.transparency.org, https://www.transparency.org/cpi2018.
United Nations Development Programme. 2019. “Human development reports.” Accessed September 10, 2019. http://hdr.undp.org/en.
Van Der Walt, S., S. C. Colbert, and G. Varoquaux. 2011. “The NumPy array: A structure for efficient numerical computation.” Comput. Sci. Eng. 13 (2): 22. https://doi.org/10.1109/MCSE.2011.37.
Wang, N. 2014. “Correlation analysis of capital and life cycle costs in private financial initiative projects.” J. Manage. Eng. 30 (5): 06014002. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000277.
Waskom, M., et al. 2018. “mwaskom/seaborn: v0.9.0. Zenodo.” Accessed September 10, 2019. https://zenodo.org/record/1313201.
Wong, P. S., S. O. Cheung, and K. L. Fan. 2009. “Examining the relationship between organizational learning styles and project performance.” J. Constr. Eng. Manage. 135 (6): 497–507. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000010.
World Bank. 2019a. “Access to electricity (% of population).” Accessed September 10, 2019. https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?view=chart.
World Bank. 2019b. “Adjusted net national income per capita (current US$).” Accessed September 24, 2019. https://data.worldbank.org/indicator/NY.ADJ.NNTY.PC.CD?view=chart.
World Bank. 2019c. “Control of Corruption: Estimate.” Accessed September 22, 2019. https://datacatalog.worldbank.org/control-corruption-estimate-0.
World Bank. 2019d. “CPIA transparency, accountability, and corruption in the public sector rating (1=low to 6=high).” Accessed September 10, 2019. https://data.worldbank.org/indicator/IQ.CPA.TRAN.XQ?view=chart.
World Bank. 2019e. “Electric power consumption (kWh per capita).” Accessed September 10, 2019. https://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC?view=chart.
World Bank. 2019f. “Electric power transmission and distribution losses (% of output).” Accessed September 30, 2019. https://data.worldbank.org/indicator/EG.ELC.LOSS.ZS?view=chart.
World Bank. 2019g. “Electricity production from renewable sources, excluding hydroelectric (kWh).” Accessed September 25, 2019. https://data.worldbank.org/indicator/EG.ELC.RNWX.KH?view=chart.
World Bank. 2019h. “GDP, PPP (current international $).” Accessed September 10, 2019. https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD.
World Bank. 2019i. “GDP per capita (current US$).” Accessed September 24, 2019. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD.
World Bank. 2019j. “Renewable electricity output (% of total electricity output).” Accessed September 25, 2019. https://data.worldbank.org/indicator/EG.ELC.RNEW.ZS?view=chart.
World Bank. 2019k. “World Bank: Data.” Accessed September 5, 2019. https://data.worldbank.org/.
Yeh, E. T., and J. I. Lewis. 2004. “State power and the logic of reform in China’s electricity sector.” Pacific Affairs 77 (3): 29.
Information & Authors
Information
Published In
Journal of Energy Engineering
Volume 146 • Issue 5 • October 2020
Copyright
©2020 American Society of Civil Engineers.
History
Received: Feb 6, 2020
Accepted: Apr 2, 2020
Published online: Jun 26, 2020
Published in print: Oct 1, 2020
Discussion open until: Nov 26, 2020
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.