Electricity demand in Tunisia

Abstract

This paper examines the global electricity demand in Tunisia as a function of gross domestic product in constant price, the degree of urbanization, the average annual temperature, and the real electricity price per Kwh. This demand will be examined employing annual data over a period spanning almost thirty one years from 1976 to 2006. A long run relationship between the variables under consideration is determined using the Vector Autoregressive Regression. The empirical results suggest that the electricity demand in Tunisia is sensitive to its past value, any changes in gross domestic product and electricity price. The electricity price effects have a negative impact on long-run electricity consumption. However, the gross domestic product and the past value of electricity consumption have a positive effect. Moreover, the causality test reveals a unidirectional relationship between price and electricity consumption. Our empirical findings are effective to policy makers to maintain the electricity consumption in Tunisia by using the appropriate strategy.