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Evidence on the stationarity of electricity consumption in India

Author

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  • Tran, Nhan Dang
  • Sahu, Naresh Chandra
  • Le, Chon Van

Abstract

This research reevaluates the stationarity of sectoral electricity consumption in a panel of 18 Indian states. We use a novel panel unit root test with an allowance for structural breaks and cross-sectional dependence. The usual univariate unit root test, which accounts for structural breaks but not cross-dependence, rejects the null hypothesis of a unit root in all states under investigation. When we incorporate structural breaks and cross-sectional dependence, the null hypothesis's rejections significantly decrease. Electricity consumption appears nonstationary in many states across all sectors, suggesting that policy changes can have long-term effects.

Suggested Citation

  • Tran, Nhan Dang & Sahu, Naresh Chandra & Le, Chon Van, 2024. "Evidence on the stationarity of electricity consumption in India," Utilities Policy, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:juipol:v:88:y:2024:i:c:s0957178724000596
    DOI: 10.1016/j.jup.2024.101766
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