An econometric analysis of residential electricity demand in Ghana

Abstract

The study examines the short- and long-run elasticities of residential demand for electricity in Ghana from 1970 to 2010. It employed a combinations of methodologies, namely, the autoregressive distributive lag bound, dynamic ordinary least squares (DOLS) and the fully modified ordinary least squares (FMOLS). Generally, the series indicated the presence of structural breaks and obtained stationarity after the first differencing and were cointegrated. The ARDL results revealed that both the long- and short-run elasticities were affected by structural breaks. The parameters were stable after correcting for structural breaks. Prominent among the policy recommendation, is the need to strengthen the effectiveness of educational agencies by changing behavioural attitude of residential consumers on the purchase of new and efficient appliance as well as enforce standards and labels.