An Empirical Investigation of the Relationship Between Electricity Consumption and Real Gross Domestic Product Per Capita in the Philippines

Date

6-2024

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Gideon P. Carnaje

Committee Member

Jefferson A. Arapoc, Ma. Angeles O. Catelo

Abstract

The general objective of the study is to examine the relationship between GDP per capita and electricity consumption in the context of the Philippines. The link between the GDP per capita and electricity consumption was investigated using econometric tests. Secondary data on GDP per capita and electricity consumption in the Philippines from 1981 to 2019 were used in the analysis. Results from the Unit Root Test show that the variables are non-stationary at levels but stationary at their first difference. The Johansen Cointegration Test was used to determine whether there is cointegration between the two variables after determining the series of I(1). According to the findings, the variables are cointegrated at rank one. This suggests that there is at most one cointegrating relationship among the variables being tested. The results of the present study show that there is no directional relationship between GDP per capita and electricity consumption. This supports the neutrality hypothesis which indicates that GDP per capita and electricity consumption are independent of one another. Since there is no causality relationship between consumption of electricity and the overall level of economic activity, policies or events that affect electricity consumption will likely have little to no effect on economic growth.

Language

English

LC Subject

Consumption (Economics), Gross Domestic Product

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2024 E2 O35

Notes

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Document Type

Thesis

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