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Empirical evidence regarding electricity consumption and urban economic growth

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  • Thomas M. Fullerton
  • Adam G. Walke

Abstract

Links between electricity consumption and economic growth are fairly well documented for national economies, but less so for urban economies. The analysis of such relationships at the sub-national level of aggregation can potentially offer a useful complement to national-level research. This study examines the electricity-growth nexus in El Paso, Texas, while also considering the roles of capital stocks and employment. Testing suggests the presence of cointegrating relationships and a vector error correction model is estimated. Granger causality tests reveal the absence of causality between electricity consumption and personal income, implying that energy conservation efforts will have a neutral effect on economic growth. Furthermore, the results indicate that causality runs from the capital stock and employment to both personal income and electricity consumption. This echoes previous research regarding the importance of accounting for capital and labour factors of production in studies of aggregate electricity utilization and economic performance. The methodology used in this analysis to develop a broad synthetic measure of the urban capital stock, including various categories of public infrastructure, can also be applied to other regions and urban economies.

Suggested Citation

  • Thomas M. Fullerton & Adam G. Walke, 2019. "Empirical evidence regarding electricity consumption and urban economic growth," Applied Economics, Taylor & Francis Journals, vol. 51(18), pages 1977-1988, April.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:18:p:1977-1988
    DOI: 10.1080/00036846.2018.1529405
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    Cited by:

    1. Merlin, Matumona Lubabu & Chen, Yinfei, 2021. "Analysis of the factors affecting electricity consumption in DR Congo using fully modified ordinary least square (FMOLS), dynamic ordinary least square (DOLS) and canonical cointegrating regression (C," Energy, Elsevier, vol. 232(C).
    2. Shulin Wan & Weixin Luan & Qiaoqiao Lin, 2021. "Industry linkage, spatial correlation, and city exports: case study of the textile and clothing export industry in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 91-112, February.

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