Empirical Economics

, Volume 41, Issue 2, pp 511–531 | Cite as

Revisiting residential demand for electricity in Greece: new evidence from the ARDL approach to cointegration analysis

  • Theologos Dergiades
  • Lefteris TsoulfidisEmail author


This article re-examines the long-run and short-run determinants of the aggregate residential demand for electricity in Greece using data spanning the period 1964–2006 and the recently advanced ARDL cointegrating method (Pesaran, J Appl Econ 16:289–326, 2001) that has not been hitherto applied to Greek data. The results of the ARDL method combined with the (Johansen, J Econ Dyn Control 12:231–254, 1988) cointegration method show the presence of an equilibrium relationship among the variables involved. These findings may shed new light on the contemplation of more effective energy policies with respect to electricity.


Residential electricity demand ARDL Cointegration 

JEL Classification

C22 Q41 Q43 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Amusa H, Amusa K, Mabugu R (2009) Aggregate demand for electricity in South Africa: an analysis using the bounds testing approach to cointegration. Energy Policy 37: 4167–4175CrossRefGoogle Scholar
  2. 2.
    Bahmani-Oskooee MM, Goswami GG (2003) A disaggregated approach to test the J-curve phenomenon: Japan versus her major trading partners. J Econ Financ 27: 102–113CrossRefGoogle Scholar
  3. 3.
    Bentzen J, Engsted T (2001) A revival of the autoregressive distributed lag model in estimating energy demand relationships. Energy 26: 45–55CrossRefGoogle Scholar
  4. 4.
    Bohi DR (1981) Analyzing demand behaviour: a study of energy elasticities. Published for Resources for the Future by Johns Hopkins Press, BaltimoreGoogle Scholar
  5. 5.
    Brown RL, Durbin J, Evans JM (1975) Techniques for testing the constancy of regression relationships over time. J R Stat Soc 37: 149–192Google Scholar
  6. 6.
    Cheung YW, Lai KS (1993) Finite sample sizes of Johansens likelihood ratio tests for cointegration. Oxf Bull Econ Stat 55: 313–332CrossRefGoogle Scholar
  7. 7.
    Dagoumas AS, Kalaitzakis E, Papagiannis GK, Dokopoulos PS (2007) A post-Kyoto analysis of the Greek electric sector. Energy Policy 35: 1551–1563CrossRefGoogle Scholar
  8. 8.
    Dergiades T, Tsoulfidis L (2008) Estimating residential demand for electricity in the United States, 1965–2006. Energy Econ 30: 2722–2730CrossRefGoogle Scholar
  9. 9.
    Donatos G, Mergos G (1991) Residential demand for electricity: the case of Greece. Energy Econ 13: 41–47CrossRefGoogle Scholar
  10. 10.
    Elliot G, Rothenberg T, Stock J (1996) Efficient tests for an autoregressive unit root. Econometrica 64: 813–836CrossRefGoogle Scholar
  11. 11.
    Engle R, Granger C (1987) Cointegration and error correction representation: estimation and testing. Econometrica 55: 251–276CrossRefGoogle Scholar
  12. 12.
    Fisher F, Keysen C (1962) A study in econometrics: the demand for electricity in the United States. North Holland, AmsterdamGoogle Scholar
  13. 13.
    Fouquet D, Johansson T (2008) European renewable energy policy at crossroads—focus on electricity mechanisms. Energy Policy 36: 4079–4092CrossRefGoogle Scholar
  14. 14.
    Georgakopoulou E, Sarafidis Y, Mirasgedis S, Zaimi S, Lalas P (2003) A multiple criteria decision-aid approach in defining national priorities for greenhouse gases emissions reduction in the energy sector. Eur J Operat Res 146: 199–215CrossRefGoogle Scholar
  15. 15.
    Granger CWJ (1969) Investigating causal relations by econometric models and cross-spectral methods. Econometrica 37: 424–438CrossRefGoogle Scholar
  16. 16.
    Halicioglu F (2004) Residential electricity demand dynamics in Turkey. Energy Econ 29: 199–210CrossRefGoogle Scholar
  17. 17.
    Harbo I, Johansen S, Nielsen B, Rahbek A (1998) Asymptotic inference on cointegration rank in partial systems. J Bus Econ Stat 16: 388–399CrossRefGoogle Scholar
  18. 18.
    Holtehahl P, Joutz F (2004) Residential electricity demand in Taiwan. Energy Econ 26: 201–224CrossRefGoogle Scholar
  19. 19.
    Hondroyiannis G (2004) Estimating residential demand for electricity in Greece. Energy Econ 26: 319–334CrossRefGoogle Scholar
  20. 20.
    Johansen S (1988) Statistical analysis of cointegration vectors. J Econ Dyn Control 12: 231–254CrossRefGoogle Scholar
  21. 21.
    Johansen S (2002) A small sample correction for the test of cointegrating rank in the vector autoregressive model. Econometrica 70: 1929–1961CrossRefGoogle Scholar
  22. 22.
    Kiesling L (2007) Retail electricity deregulation: prospects and challenges for dynamic pricing and enabling technologies. Annual Review of Regulation, Searle Center for the Study of RegulationGoogle Scholar
  23. 23.
    Krämer W, Sibbertsen P (2002) Testing for structural changes in the presence of long-memory. Int J Bus Econ 1: 235–242Google Scholar
  24. 24.
    Lee J, Strazicich M (2003a) Minimum LM unit root test with one structural break. MimeoGoogle Scholar
  25. 25.
    Lee J, Strazicich M (2003b) Minimum Lagrange multiplier unit root test with two structural breaks. Rev Econ Stat 85: 1082–1089CrossRefGoogle Scholar
  26. 26.
    Leybourne S, Mills T, Newbold P (1998) Spurious rejections by Dickey–Fuller tests in the presence of a break under the null. J Econ 87: 191–203Google Scholar
  27. 27.
    Meyer NI (2003) European schemes for promoting renewables in liberalized markets. Energy Policy 31: 665–676CrossRefGoogle Scholar
  28. 28.
    Nakajima T, Hamori S (2010) Change in consumer sensitivity to electricity prices in response to retail deregulation: a panel empirical analysis of the residential demand for electricity in the United States. Energy Policy 38: 2470–2476CrossRefGoogle Scholar
  29. 29.
    Narayan PK (2005) The saving and investment nexus for China: evidence for cointegration tests. Appl Econ 37: 1979–1990CrossRefGoogle Scholar
  30. 30.
    Narayan PK, Smyth R (2005) The residential demand for electricity in Australia: an application of the bounds testing approach to cointegration. Energy Policy 33: 467–474CrossRefGoogle Scholar
  31. 31.
    Narayan PK, Smyth R, Prasad A (2007) Electricity consumption in G7 countries: a panel cointegration analysis of residential demand elasticities. Energy Policy 35: 4485–4494CrossRefGoogle Scholar
  32. 32.
    Pesaran MH, Pesaran B (1997) Working with Microfit 4.0: interactive econometric analysis. Oxford University Press, OxfordGoogle Scholar
  33. 33.
    Pesaran H, Shin Y, Smith R (2000) Structural analysis of vector error correction models with exogenous I(1) variables. J Econ 97: 293–343Google Scholar
  34. 34.
    Pesaran MH, Shin Y, Smith R (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econ 16: 289–326CrossRefGoogle Scholar
  35. 35.
    Rahbek A, Mosconi R (1999) Cointegration rank inference with stationary regressors in VAR models. Econ J 2: 76–91Google Scholar
  36. 36.
    Romilly P, Song H (2001) Car ownership and use in Britain: a comparison of the empirical results of alternative cointegration estimation methods and forecasts. Appl Econ 33: 1803–1818CrossRefGoogle Scholar
  37. 37.
    Sa’ad S (2009) Electricity demand for South Korean residential sector. Energy Policy 37: 5469–5474CrossRefGoogle Scholar
  38. 38.
    Schwert GW (1989) Tests for unit-roots: a Monte Carlo investigation. J Bus Econ Stat 7: 147–159CrossRefGoogle Scholar
  39. 39.
    Silk J, Joutz F (1997) Short and long-run elasticities in US residential electricity demand: a cointegration approach. Energy Economics 19: 493–513CrossRefGoogle Scholar
  40. 40.
    Toda HY (1995) Finite sample performance of likelihood ratio tests for cointegrating rank in vector autoregressions. Econ Theory 11: 1015–1032CrossRefGoogle Scholar
  41. 41.
    Tsoutsos T, Papadopoulou E, Katsiri A, Papadopoulos A (2008) Supporting schemes for renewable energy sources and their impact on reducing the emissions of greenhouse gases in Greece. Renew Sustain Energy Rev 12: 1767–1788CrossRefGoogle Scholar
  42. 42.
    Yamamoto Y, Suzuki A, Fuwa Y, Sato T (2008) Decision-making in electrical appliance use in the home. Energy Policy 5: 1679–1686CrossRefGoogle Scholar
  43. 43.
    Zachariadis T, Pashourtidou N (2007) An empirical analysis of electricity consumption in Cyprus. Energy Econ 29: 183–198CrossRefGoogle Scholar
  44. 44.
    Ziramba E (2008) The demand for residential electricity in South Africa. Energy Policy 36: 3460–3466CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2010

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of MacedoniaThessalonikiGreece

Personalised recommendations