An Econometric Analysis of Electricity Demand for the Residential Sector of Pakistan

Muhammad Idrees, Kashif Raza and Babar Aziz

Abstract

This article presents an attempt to estimate electricity demand through 
various functional forms in the case of Pakistan using household level data. A 
number of articles on electricity demand estimate and interpret the results 
through different functional forms, such as linear, log linear and translog 
functional forms. However, none of the studies presents a comprehensive 
analysis based on the all three functional forms, especially in the case of 
Pakistan. The present article is an attempt to fill this gap by using household 
level data from Pakistan. Our findings show that total expenditure, house size, household size, heating degree days and temperature above threshold level 
may increase the demand for electricity. On the other hand, the price of 
electricity may decrease demand for electricity. An elasticity analysis shows 
that gas is a statistical substitute for electricity.