An econometric analaysis of Turkish industrial electricity demand

This thesis estimates the yearly industrial electricity demand in Turkey over the time period 1998-2018. This thesis employs data on industrial use of electricity, electricity prices, gas prices, gdp per capıta and value of production. All variables are not stationary at the level I (0), they become stationary at first difference I (1). Cointegration was tested by looking at the vector error correction model There is long-run and short run relationship in this model. The dependent variable of the model is industrial electricity use. The study finds electricity own price elasticity of – 0.0434, cross price elasticity of 0.074596; and industrial production index of 0.812207. The signs of all three elasticities are as predicted by theory. Both own price elasticity and cross price elasticities are found to be statistically insignificant. However industrial production index elasticity is statistically significant.