SHORT- AND LONG-TERM DETERMINANTS OF RESIDENTIAL ELECTRICITY DEMAND IN TURKEY

The purpose of this study is to predict the factors affecting the residentialelectricity demand by using a multivariate econometric model. The variablesof the model established in this context are net electricity consumption in theresidential sector, the price of electricity, real income per capita, average airtemperature showing the climatic conditions and the urbanization rate.Residential electricity demand was analyzed for short- and long-term withthe ARDL-Bound Testing by using the annual data for the years 1990-2014in Turkey. As a result of the analyses both short- and long-term residentialelectricity demand was found to be negatively and significantly affected byprice of electricity and positively and significantly affected by income,average temperature and urbanization rate. The price elasticity of demandwas estimated to be smaller than 1 in both short- and long-term. Althoughincome elasticity of demand was estimated to be smaller than 1 in the shortterm,income elasticity of demand was found to be higher than 1 in the longterm.In addition, climatic condition was found to be most effective variableaffecting residential electricity demand. JEL classifications: Q41; D12; C31.