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Electricity Consumption and Green Mortgage: New Insights into the Threshold Cointegration Relationship

Author

Listed:
  • Nicholas Lee

    (Department of Economics, Chaoyang University of Technology, Taiwan)

  • Hsiang-Jane Su

    (Department of Economics, Chaoyang University of Technology, Taiwan)

  • Ming-Chin Lin

    (Department of Economics, Chaoyang University of Technology, Taiwan)

Abstract

This paper examines threshold dynamics of electricity consumption and green mortgage. Industrial and individual electricity consumptions are considered respectively. We apply a threshold vector error correction model (TVECM) with a threshold endogenously model. An unusual regime is above a threshold, whereas below a threshold for a usual regime. Our results show threshold effects for total (or industrial) electricity consumption and green mortgage, suggesting structure changes with different asymmetric error-correction effects in the usual and unusual regimes. Specifically, in the unusual regime, the stronger effect in the total electricity consumption case for green mortgage causing electricity consumption than the opposite direction is found but the smaller effect in the industrial electricity consumption case. It implies that efficiency improvement will be proposed for a new plant and upgrades of existing plant. Therefore, our results should highlight the critical importance of using TVECM in empirical studies on threshold dynamics of electricity consumption and green mortgage.

Suggested Citation

  • Nicholas Lee & Hsiang-Jane Su & Ming-Chin Lin, 2018. "Electricity Consumption and Green Mortgage: New Insights into the Threshold Cointegration Relationship," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 39-46.
    • Handle: RePEc:eco:journ2:2018-02-5
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    References listed on IDEAS

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    More about this item

    Keywords

    Electricity Consumption; Green Mortgage; Threshold Cointegration; Nonlinear Dynamics;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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