IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/81717.html
   My bibliography  Save this paper

Electricity intensity and unemployment in South Africa: A quantile regression analysis

Author

Listed:
  • Ruzive, Tafadzwa
  • Mkhombo, Thando
  • Mhaka, Simba
  • Mavikela, Nomahlubi
  • Phiri, Andrew

Abstract

Our study investigates the relationship between electricity intensity and unemployment in South Africa. Our mode of empirical investigation is the quantile regressions approach which has been applied to quarterly interpolated time series data collected between 2000:01 and 2014:04. As a further development to our study, we split our empirical data into two sub-samples, the first corresponding to the pre-financial crisis period and the other corresponding to the post-financial crisis period. Our empirical results point to electricity intensity being significantly and positively correlated with unemployment in periods before the crisis at all estimated quantiles, whereas this relationship turns significantly negative in periods subsequent to the crisis at all quantile levels. In other words, since the financial crisis, increased electricity intensity (i.e. lower electricity efficiency) appears to reduce domestic unemployment rates, a result which indicates that policymakers should be discouraged from implementing electricity conversation strategies and encouraged to rely on environmental friendly methods of supplying electricity.

Suggested Citation

  • Ruzive, Tafadzwa & Mkhombo, Thando & Mhaka, Simba & Mavikela, Nomahlubi & Phiri, Andrew, 2017. "Electricity intensity and unemployment in South Africa: A quantile regression analysis," MPRA Paper 81717, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:81717
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/81717/1/MPRA_paper_81717.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Adom, Philip Kofi, 2015. "Determinants of energy intensity in South Africa: Testing for structural effects in parameters," Energy, Elsevier, vol. 89(C), pages 334-346.
    2. Rafiq, Shuddhasattwa & Salim, Ruhul & Nielsen, Ingrid, 2016. "Urbanization, openness, emissions, and energy intensity: A study of increasingly urbanized emerging economies," Energy Economics, Elsevier, vol. 56(C), pages 20-28.
    3. Aiyagari, S. Rao & Christiano, Lawrence J. & Eichenbaum, Martin, 1992. "The output, employment, and interest rate effects of government consumption," Journal of Monetary Economics, Elsevier, vol. 30(1), pages 73-86, October.
    4. Inglesi-Lotz, R. & Blignaut, J.N., 2012. "Electricity intensities of the OECD and South Africa: A comparison," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4491-4499.
    5. PHIRI Andrew & NYONI Bothwell, 2016. "Re-Visting The Electricity-Growth Nexus In South Africa," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 11(1), pages 97-111, April.
    6. Jordi Galí & Frank Smets & Rafael Wouters, 2012. "Unemployment in an Estimated New Keynesian Model," NBER Macroeconomics Annual, University of Chicago Press, vol. 26(1), pages 329-360.
    7. Filipović, Sanja & Verbič, Miroslav & Radovanović, Mirjana, 2015. "Determinants of energy intensity in the European Union: A panel data analysis," Energy, Elsevier, vol. 92(P3), pages 547-555.
    8. Elliott, Robert J.R. & Sun, Puyang & Chen, Siyang, 2013. "Energy intensity and foreign direct investment: A Chinese city-level study," Energy Economics, Elsevier, vol. 40(C), pages 484-494.
    9. Gaston, Noel & Rajaguru, Gulasekaran, 2013. "How an export boom affects unemployment," Economic Modelling, Elsevier, vol. 30(C), pages 343-355.
    10. Odhiambo, Nicholas M., 2009. "Electricity consumption and economic growth in South Africa: A trivariate causality test," Energy Economics, Elsevier, vol. 31(5), pages 635-640, September.
    11. Kevin S. Nell, 2006. "Structural Change And Nonlinearities In A Phillips Curve Model For South Africa," Contemporary Economic Policy, Western Economic Association International, vol. 24(4), pages 600-617, October.
    12. Mulder, Peter & de Groot, Henri L.F. & Pfeiffer, Birte, 2014. "Dynamics and determinants of energy intensity in the service sector: A cross-country analysis, 1980–2005," Ecological Economics, Elsevier, vol. 100(C), pages 1-15.
    13. Andrew Phiri, 2014. "Nonlinear Co-Integration Between Unemployment and Economic Growth in South Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 12(4 (Winter), pages 303-324.
    14. Roula Inglesi-Lotz, James Blignaut, 2011. "Estimating the price elasticity for demand for electricity by sector in South Africa," South African Journal of Economic and Management Sciences, University of Pretoria, Faculty of Economic and Management Sciences, vol. 14(4), pages 449-465, December.
    15. Zheng, Yingmei & Qi, Jianhong & Chen, Xiaoliang, 2011. "The effect of increasing exports on industrial energy intensity in China," Energy Policy, Elsevier, vol. 39(5), pages 2688-2698, May.
    16. Yuan, Mingwei & Li, Wenli, 2000. "Dynamic employment and hours effects of government spending shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 24(8), pages 1233-1263, July.
    17. Kepplinger, D. & Templ, M. & Upadhyaya, S., 2013. "Analysis of energy intensity in manufacturing industry using mixed-effects models," Energy, Elsevier, vol. 59(C), pages 754-763.
    18. Marco Guerrazzi, 2015. "Animal spirits, investment and unemployment: An old Keynesian view of the Great Recession," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 16(3), pages 343-358.
    19. Amusa, Hammed & Amusa, Kafayat & Mabugu, Ramos, 2009. "Aggregate demand for electricity in South Africa: An analysis using the bounds testing approach to cointegration," Energy Policy, Elsevier, vol. 37(10), pages 4167-4175, October.
    20. Kohler, Marcel, 2014. "Differential electricity pricing and energy efficiency in South Africa," Energy, Elsevier, vol. 64(C), pages 524-532.
    21. Andrew Phiri, 2016. "Examining asymmetric effects in the South African Phillips curve: evidence from logistic smooth transition regression models," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 8(1), pages 18-42.
    22. Odhiambo, Nicholas M., 2009. "Savings and economic growth in South Africa: A multivariate causality test," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 708-718, September.
    23. Yuxiang, Karl & Chen, Zhongchang, 2010. "Government expenditure and energy intensity in China," Energy Policy, Elsevier, vol. 38(2), pages 691-694, February.
    24. Wang, Chunhua, 2013. "Changing energy intensity of economies in the world and its decomposition," Energy Economics, Elsevier, vol. 40(C), pages 637-644.
    25. Liddle, Brantley, 2009. "Electricity intensity convergence in IEA/OECD countries: Aggregate and sectoral analysis," Energy Policy, Elsevier, vol. 37(4), pages 1470-1478, April.
    26. Calcagnini, Giorgio & Giombini, Germana & Travaglini, Giuseppe, 2016. "Modelling energy intensity, pollution per capita and productivity in Italy: A structural VAR approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1482-1492.
    27. Unknown, 2016. "Energy for Sustainable Development," Conference Proceedings 253270, Guru Arjan Dev Institute of Development Studies (IDSAsr).
    28. Adom, Philip K. & Kwakwa, Paul Adjei, 2014. "Effects of changing trade structure and technical characteristics of the manufacturing sector on energy intensity in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 475-483.
    29. Bilgili, Faik & Koçak, Emrah & Bulut, Ümit & Kuloğlu, Ayhan, 2017. "The impact of urbanization on energy intensity: Panel data evidence considering cross-sectional dependence and heterogeneity," Energy, Elsevier, vol. 133(C), pages 242-256.
    30. Herrerias, M.J. & Liu, G., 2013. "Electricity intensity across Chinese provinces: New evidence on convergence and threshold effects," Energy Economics, Elsevier, vol. 36(C), pages 268-276.
    31. Sadorsky, Perry, 2013. "Do urbanization and industrialization affect energy intensity in developing countries?," Energy Economics, Elsevier, vol. 37(C), pages 52-59.
    32. Ma, Ben, 2015. "Does urbanization affect energy intensities across provinces in China?Long-run elasticities estimation using dynamic panels with heterogeneous slopes," Energy Economics, Elsevier, vol. 49(C), pages 390-401.
    33. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    34. Sweidan, Osama D. & Alwaked, Ahmed A., 2016. "Economic development and the energy intensity of human well-being: Evidence from the GCC countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1363-1369.
    35. Hlalefang Khobai & Pierre Le Roux, 2017. "The Relationship between Energy Consumption, Economic Growth and Carbon Dioxide Emission: The Case of South Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 7(3), pages 102-109.
    36. Young, Leslie, 1991. "Unemployment and the optimal export-processing zone," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 369-385, November.
    37. Rossana Galli, 1998. "The Relationship Between Energy Intensity and Income Levels: Forecasting Long Term Energy Demand in Asian Emerging Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 85-105.
    38. Elliott, Robert J.R. & Sun, Puyang & Zhu, Tong, 2017. "The direct and indirect effect of urbanization on energy intensity: A province-level study for China," Energy, Elsevier, vol. 123(C), pages 677-692.
    39. Doménech, Rafael & Garcí­a, José Ramón, 2008. "Unemployment, taxation and public expenditure in OECD economies," European Journal of Political Economy, Elsevier, vol. 24(1), pages 202-217, March.
    40. Ron Smith & Gylfi Zoega, 2009. "Keynes, investment, unemployment and expectations," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(4), pages 427-444.
    41. Liu, Yaobin & Xie, Yichun, 2013. "Asymmetric adjustment of the dynamic relationship between energy intensity and urbanization in China," Energy Economics, Elsevier, vol. 36(C), pages 43-54.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oyewole, Oluwatomisin J. & Al-Faryan, Mamdouh Abdulaziz Saleh & Adekoya, Oluwasegun B. & Oliyide, Johnson A., 2024. "Energy efficiency, financial inclusion, and socio-economic outcomes: Evidence across advanced, emerging, and developing countries," Energy, Elsevier, vol. 289(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Trinh, Hai Hong & Sharma, Gagan Deep & Tiwari, Aviral Kumar & Vo, Diem Thi Hong, 2022. "Examining the heterogeneity of financial development in the energy-environment nexus in the era of climate change: Novel evidence around the world," Energy Economics, Elsevier, vol. 116(C).
    2. Adom, Philip Kofi & Adams, Samuel, 2018. "Energy savings in Nigeria. Is there a way of escape from energy inefficiency?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2421-2430.
    3. Amuakwa-Mensah, Franklin & Klege, Rebecca A. & Adom, Philip K. & Amoah, Anthony & Hagan, Edmond, 2018. "Unveiling the energy saving role of banking performance in Sub-Sahara Africa," Energy Economics, Elsevier, vol. 74(C), pages 828-842.
    4. Huang, Junbing & Du, Dan & Tao, Qizhi, 2017. "An analysis of technological factors and energy intensity in China," Energy Policy, Elsevier, vol. 109(C), pages 1-9.
    5. Huang, Junbing & Hao, Yu & Lei, Hongyan, 2018. "Indigenous versus foreign innovation and energy intensity in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 1721-1729.
    6. Pan, Xiongfeng & Uddin, Md. Kamal & Saima, Umme & Jiao, Zhiming & Han, Cuicui, 2019. "How do industrialization and trade openness influence energy intensity? Evidence from a path model in case of Bangladesh," Energy Policy, Elsevier, vol. 133(C).
    7. Dargahi, Hassan & Khameneh, Kazem Biabany, 2019. "Energy intensity determinants in an energy-exporting developing economy: Case of Iran," Energy, Elsevier, vol. 168(C), pages 1031-1044.
    8. Yulan Lv & Wei Chen & Jianquan Cheng, 2019. "Direct and Indirect Effects of Urbanization on Energy Intensity in Chinese Cities: A Regional Heterogeneity Analysis," Sustainability, MDPI, vol. 11(11), pages 1-20, June.
    9. Lv, Yulan & Chen, Wei & Cheng, Jianquan, 2020. "Effects of urbanization on energy efficiency in China: New evidence from short run and long run efficiency models," Energy Policy, Elsevier, vol. 147(C).
    10. Guang, Fengtao & He, Yongxiu & Wen, Le & Sharp, Basil, 2019. "Energy intensity and its differences across China’s regions: Combining econometric and decomposition analysis," Energy, Elsevier, vol. 180(C), pages 989-1000.
    11. Adom, Philip Kofi, 2015. "Business cycle and economic-wide energy intensity: The implications for energy conservation policy in Algeria," Energy, Elsevier, vol. 88(C), pages 334-350.
    12. Feng, Yidai & Yuan, Huaxi & Liu, Yaobin, 2023. "The energy-saving effect in the new transformation of urbanization," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 41-59.
    13. Lin, Boqiang & Zhu, Junpeng, 2021. "Impact of China's new-type urbanization on energy intensity: A city-level analysis," Energy Economics, Elsevier, vol. 99(C).
    14. Huang, Junbing & Lai, Yali & Hu, Hanlei, 2020. "The effect of technological factors and structural change on China's energy intensity: Evidence from dynamic panel models," China Economic Review, Elsevier, vol. 64(C).
    15. Adom, Philip Kofi & Amuakwa-Mensah, Franklin, 2016. "What drives the energy saving role of FDI and industrialization in East Africa?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 925-942.
    16. Feng, Yidai & Liu, Yaobin & Yuan, Huaxi, 2022. "The spatial threshold effect and its regional boundary of new-type urbanization on energy efficiency," Energy Policy, Elsevier, vol. 164(C).
    17. Gutiérrez-Pedrero, María Jesús & Tarancón, Miguel Ángel & del Río, Pablo & Alcántara, Vicent, 2018. "Analysing the drivers of the intensity of electricity consumption of non-residential sectors in Europe," Applied Energy, Elsevier, vol. 211(C), pages 743-754.
    18. An, Hui & Xu, Jianjun & Ma, Xuejiao, 2020. "Does technological progress and industrial structure reduce electricity consumption? Evidence from spatial and heterogeneity analysis," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 206-220.
    19. Yan, Huijie, 2015. "Provincial energy intensity in China: The role of urbanization," Energy Policy, Elsevier, vol. 86(C), pages 635-650.
    20. Lu, Yuhai & Gong, Mincheng & Lu, Linzhuo & Wang, Yaqin & Wang, Yang, 2024. "Urban polycentrism and total-factor energy efficiency: An analysis based on the night light data," Technological Forecasting and Social Change, Elsevier, vol. 198(C).

    More about this item

    Keywords

    Electricity intensity; Unemployment; South Africa; SSA; Quantile regressions;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:81717. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.